6 Types of Contract Placements

Contract staffing is not just a singular service offering that you can add to your business model. It provides a variety of ways to help solve your clients' unique staffing issues. In fact, there are six commonly recognized types of contract placements that you can offer to your clients:

1. Traditional contract staffing

• Recruiter gets contract job order and locates candidates.
• Client selects candidate.
• Recruiter negotiates rates with client and candidate.
• Contractor becomes employee of a staffing firm/contract staffing back-office.

2. Temp-to-direct hire conversions

• Contractor is placed on contract with the intention of eventually being converted to a direct hire.
• Allows client to "try-before-they-buy" to ensure the candidate is a fit before making the direct hire commitment.
• Recruiter receives hourly profit for every hour the contractor works AND a conversion fee when they go direct.
• Contract period typically lasts 6-12 months.

3. Payrolling for Direct Sourcing

• Client has a short-term need (3-12 months).
• They have already located a contract candidate.
• Client outsources employer responsibility (payroll, taxes, Workers' Comp, employee benefits, etc.) to a staffing firm/contract staffing back-office.
• Recruiter earns less hourly income, but because there is no recruiting involved, there is less work!

4. 1099 independent contractor to W-2 employee conversions

• The IRS is cracking down on companies that incorrectly classify W-2 employees as 1099 independent contractors (ICs).
• Recruiters should educate clients on the difference between ICs and employees.
• If the client has misclassified ICs, the recruiter can convert them to a W-2 employee and outsource the employment of the employee to a staffing firm/contract staffing back-office.
• Recruiter earns less hourly income, but because there is no recruiting involved, there is less work!

5. Retiree re-staffing

• Companies retain or gain the skills and experience of a retired worker by bringing them on as a consultant on a contract basis.
• The retiree becomes an employee of a staffing firm/contract staffing back-office.
• Retirees enjoy the flexibility, supplemental income, and opportunity to remain active in the workforce.

6. Internships/co-ops

• For college students and graduates trying to gain real-world experience.
• Clients avoid payroll and human resources issues associated with short periods of employment by making the interns contractors who are employees of a staffing firm/contract staffing back-office.
• A viable alternative to unpaid internships.

If you want to increase your volume of active contract placements, give FoxHire's employer of record services a try. We handle the administrative details of contract workers so that you can focus on recruiting.