The war has been waging in the Washington, D.C. area and federal agencies across the country – who has it better, government contractors or civil service employees?

There are pros and cons to each side of the coin, especially if you ask individuals who have served in both government and contract positions. But with insourcing still prevalent and companies increasingly vying for top cleared talent – especially in fields such as cybersecurity – knowing what motivates employees can make the difference in keeping them on the job.

“Government contracting companies are having to compete with their biggest client – the federal government – for talent,” said Evan Lesser, managing director of ClearanceJobs.com. Small businesses recently testified before congress about the poaching of talent through insourcing, and how it’s impacting their bottom line and ability to keep their best and brightest.

Despite the risk of contractors moving into government positions, 59 percent of contractors prefer contractor status, according to a recent survey by ClearanceJobs.com. Only six percent of those same respondents said they’d consider accepting a government position, but 54 percent said “maybe.” In contrast, 27 percent of government employees reported they were considering switching to an opportunity as a government contractor.

For current contractors salary and compensation represent the top reasons for preferring contracting. Cleared contractors earned, on average, approximately $15,000 more than their counterparts in the civil service, according to the 2011 ClearanceJobs salary survey.

Surprisingly, benefits – long considered a highlight of civil service – ranked second, with several respondents specifically noting the increased availability of personal days and the ability to work overtime – and be compensated for it.

Government employees, on the other hand, have less workplace flexibility, and typically more requirements for things like overtime approval or requesting days off. Time-to-hire can often be a major challenge for new government employees, as well. OPM reports that it took, on average, 105 days to hire for a new position. In contrast, cleared professionals typically face a much easier employment process with government contracting firms.

Another surprise from respondents was the importance of creativity and challenging work as a contracting job perk. More challenging work was cited as the fifth highest reason for contractors, who also noted their ability to implement new tools or innovations much faster than government employees.

“Contractors cited that more times than not, their ability to find creative solutions…to think outside of the box…is actually something they value a lot,” said Lesser. A government employee, on the other hand, may have to wait months for a new technology to be fielded and approved for government use.

Contracting work isn’t without its downside, however, and several contractors noted feeling like “second class citizens” in their government assignments. Contractors also noted that despite doing the same work, they’re frequently treated differently, with higher standards and in some cases lack of access to resources, including things as simple as an office email address.

While the majority of respondents preferred contracting, 41 percent said that government employment was their preference.

Civil servants participating in the survey noted that job security was the number one perk of government employment, with easier upward mobility cited as the second highest perk. Government promotions, while slower, do lay out a predictable track for employees to follow.

Better benefits, a sense of pride in government service, and more challenging work rounded out the top five reasons for preferring government employment. A relatively intangible perk, the sense of pride in serving one’s country is compelling for some, who preferred working directly for Uncle Sam rather than through a middle man. Government employees also cited the ability to “own” projects as well as having a direct line to the boss rather than working through a contracting chain of command.

The moral of the story is – personality and preference are often at the heart of contract vs. civil service debate, but there is a lot employers can do to ensure they keep their best. For government contractors vying for top talent salary and speed will continue to remain key perks, but creativity and flexibility will also be increasingly important.

As government, and even the intelligence community, embraces the reality of a more transient workforce, they’ll also need to work hard to keep new, insourced talent on board. The days of a government professional spending thirty years on the job may be giving way for the chance to spend time both in and out of government service. Which bodes well for contracting companies today who are losing cleared professionals to insourcing initiatives.

What do you think? Government employee or government contractor – which do you prefer as a cleared professional?