Contract or permanent? The gap has narrowed, and the reasons have changed
Day-rate premiums have compressed in most of our markets. What is driving contract demand now is capability timing, not cost.
Lena Brandt
Head of Engineering Practice, DACH · 16 July 2026 · 5 min read
For most of the last decade, the argument for contract hiring was speed and the argument against it was cost. Both have shifted.
Day-rate premiums over the equivalent permanent salary have compressed in five of our six markets, most sharply in technology, where the correction after the 2023–24 hiring slowdown has not fully reversed. Contractors who priced at a 60% premium in 2022 are frequently placing at 25–35% today.
At the same time, demand has changed shape. Clients are not using contract to cover headcount freezes as much as they once did. They are using it to buy capability with a defined end — a migration, a regulatory programme, a plant ramp-up — where hiring permanently would create a capability they do not need in two years.
For candidates this means the calculus is less about arbitrage and more about portfolio. The contractors doing well are the ones with a named specialism and evidence of finishing things. Generalist contracting at a premium is a harder sell than it was.
For employers, the practical advice is to be honest about which of the two you are actually buying. A twelve-month contract used as an extended probation is expensive and reads badly to the market. A twelve-month contract with a defined programme outcome attracts genuinely better people.