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I've done it plenty of times, other than the fact that the positions are a little less stable there is nothing to it. I actually prefer contracting to being a permanent employee, you usually have less responsibility and get paid better. You don't get paid holidays or vacation but the increased pay makes up for it.
The last contracting company I worked for offered better benefits than the parent company did. You also have to remember that it is in the interest of the contracting company to keep you working, for every hour you work they get paid and they want to maintain that relationship.
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