Locum Tenens vs Permanent Roles

The most common question we get from physicians considering a transition is some version of: which pays more, locum or permanent?

It is the wrong question. Or more precisely, it is a real question whose answer is “it depends,” and the dependence makes the comparison harder than the question implies.

After 30 years of placing physicians and APPs in both arrangements, the question that produces better decisions is different. The right question is: which one matches the life you want to be living three years from now?

This piece walks through how to actually make that decision, what the lifestyle differences look like in practice, and where the income comparison gets misleading.

What locum and permanent actually mean

For physicians who have only ever held one type of role, the framing is sometimes fuzzy. Quick definition.

A permanent placement is a contract with a specific facility or practice as an employee or partner. It is what most physicians do for most of their career. Salary or salary-plus-RVU comp. W2 or 1099 depending on structure. Benefits package. Defined geography. Defined schedule. Some flexibility on call structure but limited day-to-day variability in where and when you practice.

A locum placement is an assignment-based arrangement. The physician is contracted, usually as a 1099 contractor, for a defined period (a week, a month, six months, a year, indefinite) at a specific facility. Pay is hourly or per-shift, typically higher per hour than the equivalent permanent rate, but without the benefits package and without the long-term commitment. Locum agencies handle credentialing, malpractice, travel, and licensing across multiple states.

Both arrangements are legitimate full-career options. The framing that locum is for physicians “between jobs” or “not ready for permanent” is outdated. We have placed physicians in 30-year locum careers and physicians who have flipped between permanent and locum based on life stage. Both work.

The lifestyle differences that do not show up in the offer letter

The income comparison is what most physicians focus on first. The lifestyle differences end up being what determines whether the choice was right.

Permanent placement. You build community. You see the same patients across years. You watch the residents you trained with move into attending roles around you. You join the school board, the medical society, the hospital committees. The institutional knowledge compounds. You become “Dr. Lastname” in a place where the staff know your kids’ names.

The constraints of a permanent placement. You are tied to a geography. The school district, the hospital, the partner’s job, the kids’ friends, the eventual aging parents nearby – all of these become reasons not to move when the practice’s leadership changes or the system gets acquired. Permanent does not always mean stable. It means your ability to leave gets harder over time.

Locum placement. You see how different practices run. Different EMRs. Different patient populations. Different administrative cultures. Some physicians find this clinically expansive. Others find it exhausting. After two years of locum work, you have practiced in more settings than most permanent physicians see in a decade.

The constraints of a locum career. The travel does not go away. Even with stretches of long-term locum work in one location, the rhythm includes credentialing in new states, meeting new staff every assignment, and the physical reality of being away from home. Some physicians thrive in this rhythm. Some burn out within five years.

Income stability vs income flexibility

The income comparison gets framed as locum-pays-more-per-hour-but-permanent-is-more-stable. That is true on the surface and misleading in the detail.

Locum income is higher per hour because it is compensating for the absence of benefits, the absence of paid PTO, the absence of CME days, the variable nature of the work, and the self-employment tax burden. After all of those line items, the per-hour rate that looks 40% higher on paper often nets to 10-15% higher in actual take-home, depending on how aggressively the physician structures their tax setup.

Permanent income is more predictable but also more capped. Productivity-based comp can grow over the career, but the ceiling is usually set by the practice’s structure. Locum income is more variable month to month but has more upside in years where the physician chooses to take more shifts.

The framing that produces better decisions: do you want income stability (predictable monthly check, predictable benefits, less administrative load) or income flexibility (more upside if you work more, more downside if you do not, control over which months you earn at full capacity)? Both are valid preferences. They are different preferences.

For physicians with young children at home: stability often matters more than flexibility, because the household budget is calibrated to a specific number. For physicians with adult children: flexibility often matters more, because the household budget has more headroom. For early-career physicians paying down loans: the higher per-hour rate of locum can compress the loan payoff timeline meaningfully. For late-career physicians winding down: the schedule control of locum can extend a career by years that permanent practice would have ended in burnout.

Career stage matters more than the labels suggest

The choice changes by career stage in ways that are not obvious at first.

Early career (years 1-5). Most physicians do permanent first. The credentialing is simpler, the income is predictable, the path to mastery is easier when you are seeing the same patients across time. We do place early-career physicians in locum arrangements, often for J-1 visa holders or for physicians who want to test multiple geographies before committing. Both work.

Mid-career (years 5-15). This is where the most movement happens. Permanent physicians who hit the ceiling on their compensation structure often shift to locum to expand their income. Locum physicians who want to build a community shift to permanent. Mid-career is also where partner-track conversations come up at private practices, and where systems negotiate hardest to retain.

Late career (years 15+). Locum becomes more attractive for many physicians. The schedule control is the variable that matters most. A late-career physician working 8-12 locum shifts per month, in regions and hospitals they choose, often reports higher career satisfaction than the same physician would have at the same point in a 30-year permanent role.

How to actually decide

Three questions that produce better decisions than “which pays more”:

Where do you want to be in three years? Not the exact location, but the structural answer. Same city, same school district, same hospital? Or open to the geography being a variable? If the answer to the first version is yes, permanent is the better default. If the answer to the second version is yes, locum is at least worth a serious look.

How much administrative load do you want? Permanent has less. The benefits, the malpractice, the licensing, the tax setup are mostly handled. Locum has more. The 1099 tax structure, the multi-state license management, the credentialing rotation, and the periodic gaps between assignments require more active management. Some physicians treat that load as freedom. Some treat it as friction.

What does your household budget actually look like? Stable income is more useful when fixed costs are high (mortgage, school tuition, predictable family expenses). Flexible income is more useful when fixed costs are low and the physician has more control over how much they earn in any given month. The household budget answer often resolves the question more cleanly than the lifestyle question does.

The recruiters at MedSource Consultants have placed physicians in both arrangements across 30 years. We are happy to walk through what the structure of either option would look like for your specialty, your geography, and your career stage.

For a confidential conversation: 800.575.2880.