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Many companies want to “try before they buy” on employees they are looking to hire. This often means hiring them on a “contract to hire” basis. While this might seem bad for employees and even recruiters, it’s great for everyone involved!

Hiring from contract to full-time can help the recruiter make a placement; the company gets the person best for them, and the employee gets their foot in the door. Whether they convert or not, there are many ways this is a win/win for everyone. Let’s dive in.

What is a Contract to Hire Employee?

Hiring in this manner means the company can have an employee work for them on a short term contract to see how they like them. If they want to hire them, they then “convert” the employee to a permanent W2 employee. 

On the other hand, they could decide to stay on contract long-term or even let the employee go and try someone else out for the role. There are three people most affected by this type of employment, the recruiter, company, and candidate. However, all get something out of this rather than anything taken away. 

Why is Contract to Hire Perfect for Recruiters?

First, you the recruiter. Why should you take part in something that could take away the need for placements? Well, there are a few good reasons. 

You Make a Placement You Otherwise Wouldn’t Have

The first reason this is a great deal for you is that you’ll get to make a placement that you might not have otherwise. At the end of the day, having a short-term contract means having a contract. That means consistent money in your pocket, even if only for a few weeks or months. 

You Get a Conversion Fee if Things Work Out

Thinking about a placement converting shouldn’t be a bad thing. If you’ve set up your contract right, then having a candidate convert should make you money! While each situation is unique, this conversion fee should be proportionate to what you would have gotten should they have stayed on contract through you. We offer free conversion fee templates to get you started.

You Can Get More Work in the Future

Finally, if this works well, then your client company is more likely to come back to you in the future for more contract-to-hire placements or even regular contract work. That means even more money in your future! 

Why is Contract to Hire Perfect for Companies?

Now that you know it’s a good deal, you might have to do some explaining to the companies you work with. Much like the good-deal you get, they also win more than they lose. 

Test Run Candidates

First, a company doesn’t have to commit without knowing what they’re getting into. When they hire someone outright, no matter how good the resume, they are still taking a risk that the candidate is not the perfect fit. By going from contract to hire, they minimize this risk with a test-run.

Find Who’s Best, Not Who’s Safe

Since companies don’t have to worry about all the hiring paperwork with the wrong person, they can try people who they like but aren’t 100% positive about. Since they don’t have to go with the “safest” option, this can mean finding someone even better for them, that they’d never have taken a risk on otherwise. 

Bring on Talent During a Hiring Freeze

Many companies go through hiring freezes throughout their lifetime. A majority of those hiring freezes take place in Q4 or Q1. These freezes eliminate hiring managers’ ability to bring on talent to fill open roles. However, in some cases companies still need labor to operate. Additionally they would prefer to keep the labor they bring on, especially if they are training them and investing in them. Contract to hire arrangements are perfect for these scenarios. Companies can bring on a contract employee during this time, and then convert them once the hiring freeze is over. This type of arrangement could be a life saver for a hiring manager that is desperately trying to fill the talent gap.

Why is Contract to Hire Perfect for Candidates?

Finally, there’s a high chance that your candidates will have questions. Mainly, “Why should I work contract when I’m looking for full-time work?” On the other hand, they might ask, “Why would I go to full-time when I like contract work?” As you might expect, there’s an answer to that. 

Take Opportunities That You Didn’t Know You Would Have

The most obvious thing that can come from a contract to hire position is a full-time job. However, it’s more than that. People that take contract-to-hire roles are also getting to test run a company. 

It’s an opportunity to do something new, something they may end up loving more than had they said no. They could get to see what it’s like to work somewhere they might not have been able to get a job offer from straight away. 

Contract-to-hire is a win-win for everyone. As the recruiter, it’s your role to mediate this ground and make sure everyone is getting what they need. However, FoxHire is here to help. Our tools will help you manage your contracts and placements while decreasing your risk. That leaves you free to network, place more workers, and get more conversions. 

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