8 Truths About Contract-To-Hire Positions in 2024

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With the rise of quitting trends like the Great Attrition, the employment industry has taken a huge blow. To tackle these trends, employers have introduced an alternative that lies between permanent and temporary on the employment spectrum. This is contract-to-hire, an employment type where both the employer and candidate agree to a contract that requires the employee to work for a dedicated time. After the decided time, the company will decide whether they want to keep the employee in a full-time position or not.

Contact-to-hire is a relatively new idea that has taken a hit after the quitting trend post-COVID-19, so there is still some ambiguity that surrounds the topic. We are here to get into the details of contract-to-hire phenomenon and demystify 8 facts about contract-to-hire positions in 2024.

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What is a Contact-To-Hire Position?

A contract-to-hire is an employment type where a candidate finds a new role in a company by utilizing the services of a staffing agency. But how do contract-to-hire positions work? Let’s break down the contract-to-hire meaning.

A business has an open position and plans on hiring contract-to-hire individuals for the job. To find such employees, the company will take the services of a staffing agency that will find the right candidates on their behalf. The staffing company will essentially take care of the entire recruiting cycle, from sourcing candidates to conducting screenings and creating a candidate pipeline.

Once the staffing agency has chosen the right candidate, he or she will be interviewed by the end-user company, who will make the final decision based on the experience and qualifications of the candidate. After the candidate is finalized and selected by the employer, they will begin working under the payroll of the staffing company instead of the actual employer.

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8 Truths About Contract-To-Hire Positions You Didn't Know

With a staggering 25% rise in voluntary quit rate as compared to pre-pandemic levels, the rate has reached an all-time high in the United States. This level of uncertainty is a nightmare for organizations but they have found their solution in contract-to-hire roles. Contract-to-hire positions offer a sizable benefit for all the parties on the table, with 41% of HR professionals ready to hire contract workers for their organizations, according to a survey by Wiley. Here are some truths about contract-to-hire positions that might be an eye-opener for you.

1. Trial run before direct hiring

Hiring a full-time employee is always a gamble for both parties. When hiring full-time, the employer invests a great deal of money, time, and resources for the new employee. However, there is little to no guarantee that the candidate will be a good fit for the organization in the long run.

This is where the appeal for contract-to-hire positions shines through, with their “try before you buy” opportunity that attracts employers. With the help of contracts to hire positions, businesses can minimize the costs and risks associated with hiring a bad candidate and shelling out thousands of dollars on replacements.

On the flip side, candidates look forward to joining organizations that suit their preferences and offer flexibility and other benefits they look forward to. If the position is a contract to hire, then it’s easier for the candidate to judge the role and the company before deciding to join full-time. Employees can easily move on the other roles if they do not appreciate the work culture, the responsibilities, or the compensation provided by the company.

2. Streamlined hiring process

Let’s face it – the HR department of your company is already covered in tasks up to their neck, and finding the time to search, interview, screen, finalize and onboard contract employees is the last task on their checklist. Instead of wasting their time and resources on the tedious hiring process, most companies find refuge with staffing agencies that take away the burden of filling contract-to-hire roles.

From the initial screening to the final interview, all the tasks are handled well by the staffing company on behalf of the employer. Expediting the process to a staffing agency like Apptree Staffing Solutions makes the whole hiring process, including the interview, done in a breeze. This is perfect if you want to fill capacity gaps in your organization as quickly as possible, without the hassle of hiring a full-time employee.

3. Tackle budget constraints effectively

Business is all about how you place your financial strategy. And for small businesses or start-ups, it can be next to impossible to dish out the funds to facilitate a full-time hire in their team. But that doesn’t mean that these small businesses will stop hiring others, instead they acquire contract-to-hire positions to fill the roles.

A contract-to-hire model is used very strategically by organizations that keep the business running without suffering from an internal capacity gap. Once you hire a candidate on a contract-to-hire position, you can easily line up the finances of your small business in the duration of their employment with you. Once you’re more financially stable, you can then onboard the contract to hire employees as a permanent part of your team, a win-win for both players.

If your company is facing mass layoffs or economic turbulence, then a contract-to-hire allows you to manage your operations without hindering the growth of your business.

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4. Fill the employment gaps

Employment gaps in the resume are frowned upon by many employers. Contract-to-hire positions offer an easy, no-commitment route to fill these gaps in your resume with your experience working on contract roles.

Contract-to-hire positions are short, but they stand with full-term employment in terms of experience. When you start to work in these positions, it demonstrates your ability to adapt to changing work environments, be a continuous learner, and deem you a reliable and effective person. With contract-to-hire roles, you can work on five different projects in five different companies in one year, giving you the expertise of that particular role, even if you didn’t get hired as a full-time employee. C2H marks you as a professionally active person, which works in your favor wen you look for full-time jobs in the future.

5. A perceived threat to job security

According to Randstad’s annual Workmonitor survey, 37% of people are concerned about losing their jobs. Contract-to-hire positions pose this threat to job seekers who are hesitant to apply for such positions out of fear. Most candidates are too worried about losing the job once the contract ends, which means they have to start the entire job hunting process again.

However, it’s important to consider here that each individual is different, and while one candidate may be scared about the idea of a contract-to-hire position, another person may enjoy the excitement of switching careers once the contract ends. When you partner up with a staffing agency, make sure that they communicate the right responsibilities, benefits, and expectations to each candidate during the hiring process.

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With Apptree Staffing Solutions, you can find temp, temp-to-hire, part-time, and full-time opportunities.

6. Protection against unexpected changes

The business world is very unpredictable; one moment your business is grappling with financial challenges and the next, you secure a game-changing partnership. If this volatility leads to unexpected growth for your business, then you have to take the right measures to accommodate it without overworking your full-time employees. Whether you land a new client, expand a product, or tap into a new target market, contract-to-hire prepositions help you to scale your workforce as quickly as possible.

In times of unpredicted growth of expansion, you cannot expect your full-time employees to handle all the additional workload without getting exhausted. This can make things more challenging than they already are. By leveraging contract staffing, you can efficiently address immediate capacity gaps during an expansion. And the best part is that once you have overcome the initial challenging period, you can decide to end the contract and scale the workforce back to usual.

7. Dry candidate pool

One thing we have to agree on is that employee benefits are not the same for full-time positions and contract-to-hire positions. Typical employment benefits like retirement benefits, health insurance, sick days, and paid time off are forms of compensation that are usually reserved for full-time employees. Contract hires can only benefit from some of these perks until their contract is turned into permanent employment.

This seemingly unfair treatment causes many candidates to avoid these positions, which makes the contract-to-hire candidate pool narrow as compared to the full-time hiring. This can make things competitive for the staffing agency you hire but a good one like Apptree Staffing Solutions can find the best candidates for your company in no time!

8. Grow your network

Professional networking becomes ten times easier when you are open to contract-to-hire positions. As you sign contracts and start working with various companies across different domains, you build meaningful connections with people.

Even if your employer does not upgrade you to a full-time position, you have still made a good impression on the employer. You never know what opportunities this might open for you in the future. You can also ask for positive recommendations, job referrals, and advice from your employer which can benefit in your next job search.

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Conclusion

We have successfully explored the truths about contract-to-hire positions that eventually benefit you as an employee and as a business in 2024. From providing a swift solution to immediate talent needs to offering financial flexibility for smaller businesses, these positions are a strategic part of your workforce management.

As organizations continue to aim for efficiency in their operations, implementing contract-to-hire positions can be a game changer that can help you navigate the volatile job market.

Are you ready to streamline your hiring process and find the right talent for your team? Explore the benefits of temp-to-hire solutions with Apptree Staffing Solutions!

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