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There are many advantages of contract staffing, most of them geared toward what it can do for you and your firm financially, both in the short-term and in the long-haul:

1. Earn more money. Many direct hire recruiters believe there isn’t enough money in contracting to be worth their time, but that’s simply not the case. For example, if you have 10 contractors working on assignments, and you’re earning an average of $12/hour for each one, that’s $120/hour. Over the course of a year, those contractors would earn you $249,600. And that doesn’t even include overtime. (Contractors get paid for every hour they work, and consequently, so does the recruiter who placed them.)

Annual Recruiter Income graphic 2

 2. Enjoy consistent cash flow and flexibility. Not only can you make a substantial amount of money by adding contracting to your business model, you can also earn it in a steady fashion. As a result, you can offset the peaks and valleys that typify the world of direct hire recruiting. In that world, when you leave your phone, your chances of making money pretty much stops. Contracting is different. As mentioned above, you continue to earn money each hour your contractors are working. Consequently, you have the freedom and flexibility to take a day off work… and you’ll still make money. And since most clients pay invoices on a weekly basis, you’ll be able to enjoy a weekly cash flow.

3. Improve your direct hire business. How can this be? For starters, with the steady cash flow that contracting provides, you have the confidence to turn down bad direct hire business and focus on opportunities that are most likely to be lucrative. Secondly, your contract staffing services could help you attract new clients who may also use you for their direct hire placements.

4. Close more deals by offering contract-to-direct candidates. Contracting comes in handy when you have the perfect candidate for a client, but the client isn’t certain if they want to hire the person on a direct hire basis. If the candidate is willing, you can place them instead on a contract-to-direct basis. This will give the client the opportunity to “try before they buy.” In this type of deal, you’ll earn hourly income during the contract period. Then, if the client decides to hire the contractor on a full-time basis, you can also earn a conversion fee. More companies are choosing this option because if the contractor isn’t a fit, they can simply end the assignment without any negative ramifications.

5. Build a new revenue stream with the same client base. Which companies should you go to for contract job orders? The clients you already have. Statistics show that 80% of a recruiters’ direct hire business comes from existing direct hire clients., so the business is just there for the taking. All you have to do is tell your clients you can place contractors. They likely will be happy to give their contract business to you since they already like and trust you.

6. Avoid the hiring freeze barrier (and provide a solution). During a hiring freeze, companies still have deadlines to meet and projects to complete. They can do so by using contract workers paid for through the company’s operating budget. By using their operating budget, they can meet deadlines while still honoring the corporate hiring freeze. Everybody wins. (But more importantly, you win.)

7. Meet all of your clients’ needs. Contract staffing allows you to satisfy ALL of your clients’ needs, setting you up as a “sole-source provider.” If you are not meeting all of your clients’ needs, they are going to go to other recruiters who can. And the last thing you want is another recruiter getting their foot in the door with one of your clients.

8. Retire from recruiting with something to sell. Most recruiters don’t have an exit strategy for selling their business. When the owner of a small direct hire firm decides to retire, there usually isn’t much to sell. However, if those direct hire recruiters had added contract staffing to their business model, they’d have something to sell and they’d be able to retire comfortably. The value of contracting is in the contractors themselves and the money that those contractors generate.

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