The perks of contract-to-hire are numerous and can be highly beneficial for both companies and employees. However, there are some nuances that companies need to understand when it comes to this type of recruiting and hiring strategy contract staffing specialists.

The biggest difference between a contract-to-hire employee and an independent contractor is payroll. Contract-to-hire employees are on the payroll of the staffing agency, not your company. In addition, the staffing agency covers all their taxes, unemployment insurance, and worker’s compensation. This is why staffing agencies are typically a better option than an independent contractor for this type of position.

Your contract-to-hire candidates will be vetted and hired in the same manner as you would with any other candidate. The staffing agency will handle the front-end recruitment process, which includes sourcing candidates, screening, and interviewing. Once they feel confident in a candidate’s skills and fit, they will send them to your company for final interviews. The end-user will then make the decision whether to offer them a full-time job. Your staffing partner will be available to help with any questions, concerns, or issues that may arise throughout the hiring process.

One of the benefits of contract-to-hire is that it allows your company to evaluate a candidate without making a long-term commitment. This is especially important for companies who are looking to fill a critical role but don’t have the budget to hire a new full-time employee immediately. Contract-to-hire candidates also provide a great opportunity for a company to test out an employee to see how they work with the team and the rest of the organization before making a full-time commitment.

Another benefit of contract-to-hire is that your hiring costs can be reduced by using this type of recruiting approach. You will not have to cover any benefits like health insurance, retirement, sick days, etc. since these are usually reserved for full-time employees. However, your staffing agency will be responsible for covering these expenses until the employee is converted to a permanent employee.

If you decide that a contract-to-hire candidate is not a good fit for your company, you can simply extend their contract with the agency or find another qualified candidate. This will save you time and money in the long run. However, it is always a good idea to have a backup plan for these types of scenarios.

The biggest drawback of contract-to-hire is that if the company determines that they are not a good fit for the candidate at the end of the contract, it is likely that the candidate will be out of a job and will need to start their search all over again. This is why it is critical to clearly relay timelines and expectations to your contract-to-hire candidates during the interview process. Otherwise, they might not have the motivation to stay on for a potential new full-time job. You should also review the terms of your contract-to-hire agreement with a legal team to ensure it is clear and protects both parties.