In today’s fluid business climate, leaders eventually face the decision of contractor vs. full-time employee.
When you’re on the search for new talent to help your company grow, you’ll likely encounter a variety of terms used by different recruitment and staffing agencies to describe their services. For example, some agencies provide direct hire or full-time recruiting, while others offer temporary or contract-to-hire staffing services.
Which hiring solution is best for your organization? To help you answer this question, we compare direct hire / full-time employee options with contract and contract-to-hire choices, defining each along with their unique advantages or disadvantages.
Looking at the Options
In the Direct Hire process also known as Direct Placement or Full-time Permanent Placement, a staffing agency or recruitment firm facilitates the hiring of permanent staff to their client’s payroll. While the staffing agency handles the direct hire recruiting tasks, the selected candidate becomes part of the client’s organization as a full-time staff. Alternatively, the Contract process provides a resource to the client without all of the associated hiring overhead. Contract length varies depending on the client need.
Pros of Direct Hire Recruiting Processes
- Allows new hires to feel that they are “part of the team” from Day One.
- Locates permanent talent to fill your long-term employee needs faster than most organizations can do it on their own.
- Provide an attractive option for candidates seeking a greater sense of job security as well as access to the company’s benefits program.
- Attracts a broader pool of prospective candidates.
- Using direct hire recruiting is a great option when you want to add permanent staff and have available headcount room.
Pros of Contract Hiring
- Enables the engagement of a resource with the ‘right skills’ in a timely manner to address a specific project need.
- “Elasticity.” As project needs ebb and flow, contractors provide flexibility to organizations who may only have short term needs or who may need to pivot depending on project expansion/contraction.
- Some of the best talent available in the market prefer to operate as contractors. This option provides organizations with access to a broader group of skilled practitioners in a time compressed manner.
The Contract-to-Hire Option
In today’s fast paced, continually changing technology world, there is another ‘hybrid’ model that many companies are leveraging quite effectively: Contract-to-Hire. Providing a Contract-to-Hire solution also benefits the contractor because it gives them added incentive to stay with the client organization.
While most recruiting firms do not offer this option, the Contract-to-Hire model can provide a significant hiring advantage over one’s competition.
Contract-to-hire resources prove themselves long before a long-term commitment needs to be made.
The Bottom Line: Making the Contract vs Full-Time Decision
If you run a small, medium or even large business and have recognized that a larger or stronger team is needed for a project, then it makes sense to hire contractors.
If you hire temporary employees who prove themselves invaluable assets, bring them on board as full-time or contract-to-hire workers.
Conversely, if you don’t have any contract employees, ask yourself whether maintaining a staff of full-timers is in your company’s best interest. Analyze your team’s work hours (and how frequently you hire contractors).
Global workplaces are trending toward greater flexibility. In this climate, your business will probably find that a hybrid approach works best. You can maintain a low overhead by only providing workstations, benefits, and job security to key employees.