Over the past two years, FoxHire has noticed a 32% increase in traditionally direct-hire recruiters who made their first contract placements through us. We surveyed some of those recruiters to see what caused them to add contracting to their business model and will share some of their responses in this three-part series.
Hiring freeze. Those two words can stop recruiters dead in their tracks. After all, if a client says they are unable to hire, where does that leave you? It’s the one client excuse that there is no easy argument against.
Or is there? Several of the recruiters we work with have discovered another word that can immediately melt the ice on a deep hiring freeze…contracting! In fact, for many, hiring freezes lead them to their first contract placements.
Hiring managers are more likely to utilize a contractor because they require less commitment from the client than a direct-hire and the money for contractors generally comes from a different budget.
“Many clients [this past year] were uneasy to bring on full-time employees,” said Jeffrey Gilbert of Kingfish Technology. “They thought that contractors would be the best route until the economy stabilized.”
As Larry Burton of Career Partners International-Houston found, contracting can keep clients from losing great candidates.
“One of our direct-hire clients interviewed our candidate and wanted to make an offer to her,” Burton said. “Then they had a hiring freeze and could only bring her on through a contract arrangement. We were able to do that through FoxHire, and the service worked great. Eventually, the candidate was converted to a full-time direct-hire.”
The great thing about temp-to-perm conversions such as the one Burton experienced is that the recruiter is not only paid for every hour the contractor works, but also earns a conversion fee once the worker officially joins the clients’ payroll.
“One of our best direct-hire clients had a hiring freeze,” said Marc Tappis of Opportunity Search, Inc. ”They’re a large, Fortune 100 company, and the freeze came from corporate, but the group we were working with had a need to hire. The way around it was to hire contractors, and they hired two. One converted to perm after six months. We were paid a substantial conversion fee, in addition to being paid the hourly rate. The other candidate is still working as a contractor after seven months.”