Contract to hire what does it mean

If business needs change due to seasonality or if the company has a short-term project that requires more resources than it has available, staffing the project or bringing additional resources to handle the workload without having to hire a permanent employee is a great option.

A company outsourcing its recruiting to a staffing agency can better focus on strategic hires for their business. Human resources professionals are very busy with heaving recruitment processes and workload. As a result, spending a lot of time and energy for a short-term position may not be something that they may be inclined to handle with the same vigor and energy as a strategic hire. A contract to hire advantage is that it allows companies to save time by not having to deal with heavy recruiting to fill a short-term need.

C2H staffing provides for a more flexible approach for companies experiencing growth and operational expansion. However, although the company is seeing growth, it is not yet prepared to hire someone on a full-time basis due to certain contingencies or factors that may affect the client contract or deal.

A company can bring the necessary resources to handle the additional workload until it determines that the new workload is more permanent and requires an additional direct headcount.

In that case, it can hire the same contract to hire employee who has been working on the same project and is already familiar with the business. Companies do not have to spend labour-intensive effort in directly hiring and recruiting a person to fill a position. However, the mere nature of a contract to hire job is that it is short-term. As a result, when the contract is over, the company may need to start all over again with another candidate.

These factors may result in an organization having to start the same process over again with a new candidate. In general, candidates perceive a contract to hire position to offer less job security. The job expectations must be clearly communicated to the candidates to ensure that both the candidate and company are aligned in their plans. Another disadvantage of the contract to hire setup is with regards to the limited number of candidates willing to work under this type of arrangement.

Generally, candidates look for better job security by finding a permanent job and are looking to get company benefits such as vacation , healthcare plans , retirement savings, pension and so on. For this reason, contract to hire work tends to have an unfavourable reputation due to the lack of employment benefits and its short-term scope. Working as a contract to hire will not provide candidates with these benefits available to direct employees. A Corp to Corp C2C is when a person is hired as an independent contractor.

In other words, the person is a freelancer who will handle a specific project, task or function for the company for a period determined under the Corp to Corp contract. The contractor is not an employee of the company and is not legally subordinated to the employer. As a result, there is no employer-employee relationship and the contract is purely commercial in nature. A contract-to-hire arrangement is like a hybrid of the a temporary employment contract and an independent contractor.

This means that the company filling a contract-to-hire position does not have an employer-employee relationship with the person. The contract-to-hire employee works just like a typical employee working for the company.

To mitigate risk, staffing agencies will generally require the company to provide them with contractual commitments that they will treat the contract-to-hire employee fairly and in accordance with employment laws.

Then the shortlisted candidates are passed along to the client for any final interviews. The end-user company makes the final decision, with insights and guidance from the staffing agency if needed. The contract duration can vary from one month to being indefinite, and in almost all situations, the client has the option of hiring the employee full time or terminate the contract employment.

Direct hire means a direct job offer to a candidate from the intending client company, usually for permanent roles in the company. The employee that joins the organization through direct hiring is given all company benefits and remuneration.

In direct hire, which is also known as direct placement, the staffing agency finds, qualifies and hires permanent staff members on behalf of their client. In this case, it is best for both parties to find a better fit for the future than sticking with someone who is not the exact right fit. Some job seekers may be hesitant about accepting a contract-to-hire position simply based off expectations or assumptions.

For example, if a candidate is too worried that they will lose their position after the contract ends and have to start the job hunt all over again, they may prefer to look for a direct-hire position. This will depend on the preferences and mindset of each individual candidate, so it is not something to stress about — but is something to keep in mind when considering leveraging contract-to-hire positions.

The key is to ensure that your staffing agency partner is clearly relaying timeframes and expectations to the candidates they are interviewing for your contract-to-hire positions. Typically, employment benefits such as paid vacation time, sick days, health insurance, and retirement savings plans are reserved for direct employees. For contract hires, they would only be eligible for these perks if and when they receive a full-time position at the end of their contract.

For this reason, some candidates may not be interested in a contract-to-hire position, meaning your staffing agency could be working with a slightly more limited candidate pool than they would be for a direct-hire position.

To see success with contract-to-hire positions, it is vital that you are working with recruiters who have taken the time to understand your company and its culture so they can place candidates who have the most potential to be aligned with your long-term workforce goals.

For more than a decade, the experts at 4 Corner Resources have exemplified this candidate-focused and client-driven work ethic. We help businesses in the Central Florida area and beyond to attract, qualify, and screen a large pool of potential candidates. As a nationally-recognized staffing agency, our adaptive and flexible style makes it easy for our clients to accomplish their staffing goals, whether that includes contract-to-hire or more traditional direct hire roles.

Have you decided that contract-to-hire employment is right for your business, or need additional guidance to reach a conclusion? Get in touch with our staffing experts today and experience the 4 Corner Resources difference when it comes to filling your contract-to-hire positions. Pete Newsome is the president of 4 Corner Resources, the nationally acclaimed staffing and recruiting firm he founded in His mission back then was the same as it is today: to do business in a personal way, while building an organization with boundless opportunities for ingenuity and advancement.

Between an acute skills shortage and an intensely competitive job market for employers, the stakes Is your organization looking to hire a healthcare administration professional? Privacy Policy Sitemap. Contract-to-Hire Pro 2: The Ability to Experience a Trial Run Hiring a new full-time team member is a big commitment for your organization and it is also a drastic life change for the employee.

Contract-to-Hire Pro 3: Budget Flexibility When working with a restrained budget, contract-to-hire positions can offer a monetary advantage. Contract-to-Hire Pro 4: Staffing Flexibility Being over-staffed and paying salaries and benefits for employees you do not really need is wasteful. Contract-to-Hire Pro 5: Savings on Specialized Skills Oftentimes, completing a unique project will require skills you do not already have in-house.

Contract-to-Hire Pro 6: Accommodate Growth You cannot always predict what the future will hold — especially in business.

Contract-to-Hire Con 2: Perceived Lower Job Security Some job seekers may be hesitant about accepting a contract-to-hire position simply based off expectations or assumptions. Contract-to-Hire Con 3: Limited Candidate Pool Typically, employment benefits such as paid vacation time, sick days, health insurance, and retirement savings plans are reserved for direct employees.

Share on facebook Facebook. Share on twitter Twitter. Share on linkedin LinkedIn. Share on reddit Reddit. Recruiting Insights Blog Posts:. Leading Channels to Source Healthcare Talent Between an acute skills shortage and an intensely competitive job market for employers, the stakes