The new temporary employment law: Risks for those considering employment in a line organization and the benefits of remaining in the consulting role

The new rules in the Temporary Employment Act that came into force on 1 October 2024 were originally intended to ensure the security of individuals working as staff in industry, but given their design, most service-oriented industries are covered. In recent months, we have seen several examples where consultants in the IT industry who have chosen to move to a job within a line organization have been dismissed from their new job only a few months into their new job. The fact that there is now legislation that “forces” consulting companies to offer employment or pay two months’ salary in the event of a longer commitment means that we should see significantly more examples where individuals leave a secure job with a consulting company to go to a line organization where the principle, as everywhere else, “last in” – “first out” applies. In this case, with the knowledge that the job offer is enforced by law, we should be able to see many more sad examples where individuals are thrown into unemployment within a short time of their employment.

Risks of permanent employment at the client company

1. Uncertain future with changing needs: Many people see employment in a line organization as a safe solution, but this is not always the case. If you get a permanent job with a client company, there is always a risk that your specific skills will no longer be in demand when the project you were hired for ends or if the company’s needs change. Companies may need to restructure, which can lead to you becoming redundant, being reassigned to a role that does not match your skills, or in the worst case, being laid off.
2. Lack of development opportunities: Becoming a permanent employee at a client company can also mean that you are stuck in a specific role or task for a long time. It can be difficult to develop your skills or advance if the company does not offer the right development opportunities. This can hinder your career development and make you less attractive in the job market in the future.
3. Reduced flexibility: As an employee in a line organization, you are tied to a company and must adapt to their long-term strategy. It can be difficult to change tasks, departments or get access to exciting projects. If you remain as a consultant through a consulting agency, you retain the flexibility to quickly change assignments and adapt your career to your own goals and interests.

Advantages of being a consultant through a consulting agency

The consulting role through a consulting agency has several advantages that should not be underestimated. You often have greater opportunities to build your attractiveness by broadening both industry experience and experience from different roles and positions as a consultant.

1. Greater security through continuous assignments: As a consultant through a consulting agency, you have access to many different assignments and if one project ends, the agency will help you find the next one. This provides a smoother workflow and reduces the risk of suddenly being out of work, which can happen in an employment with a line organization when the need for your skills ceases.
2. Opportunity for continuous development: As a consultant, you can work in different industries, with different types of projects, and for different clients. This gives you the opportunity to constantly expand your skills, gain experience from different work environments, and stay up to date with the latest developments in your field. This variety allows you to constantly grow professionally, something that can otherwise be difficult to achieve.
3. Stronger negotiating position: Consultants, especially through consulting agencies, often have better opportunities to negotiate compensation and terms. Because you offer specialized skills for specific projects, you can value your expertise and negotiate better compensation and benefits.
4. Flexibility and freedom: As a consultant, you retain the freedom to choose the assignments that suit you best and you can easily change direction if you wish. You can work with multiple companies, thus avoiding the uncertainty that can come with a traditional line-organizational position, where you are dependent on the success and needs of a single company. This flexibility is often one of the greatest advantages of being a consultant, especially in a changing job market.
5. Long-term security through the consulting agency: By working with a consulting agency, you gain access to a broad labor market and assignment opportunities. The company helps you find new assignments when a project ends, which means you always have a backup plan. This creates long-term security and reduces the risk of periods of unemployment.

Conclusion

By working as a consultant, you maintain the advantage of having access to several different assignments while minimizing the risk of becoming redundant or trapped in a role that does not match your ambitions.