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For many recruiters, this current recession has become a war of attrition, as they attempt to simply survive the stormy times until the next upswing in the economy. It’s a storm that has already put some recruiters out of business.

But it doesn’t have to be that way! Companies in every city and state are looking to maintain productivity during the recession. Even if there’s a hiring freeze, companies need to finish projects and meet deadlines. It’s already been proven that contractors are a viable and valuable option for these companies.

Two key elements make contracting extremely attractive to companies: cost savings and staffing flexibility. Both of these are critical for any company seeking to maximize its resources and productivity during recessionary times. Simply stated, hiring a contractor is a low-risk proposition, and companies are extremely adverse to risk at the moment.

Considering the circumstances and the companies’ outlook, providing contract candidates and contract-to-direct services is helping recruiters to not only weather the recession, but also to thrive during it. In fact, during the past 12 months, recruiters who used FoxHire’s (FH) back-office to place contractors have earned $3,194,822 in profit!

Thriving instead of surviving
Two recruiters who are surviving the storm and thriving are Bob Vogt of Vision 2020 in Centerville, Ohio, and Angela Marasco of A. Marasco Recruiting in Bellbrook, Ohio. Vogt and Marasco, who are both Preferred Members of FoxHire Network, have made nine contract split placements during the past two months. One of Vogt’s clients had a large project that required 20 or so contractors. He approached Marasco about “partnering” to see if they could pool their resources to fill all the contract job orders and to date, they’re about halfway there.

Both recruiters are actually direct-hire recruiters, and the pair’s first two split placements were of the direct-hire variety. However, that was before the Stock Market became the epicenter of a world financial storm. Shortly thereafter, many companies pulled their direct-hire job orders and began to institute hiring freezes.

While that proved to be problematic for recruiters everywhere, Vogt and Marasco switched gears from direct hire to contracting. Fortunately, Vogt is very experienced in the realm of contract staffing and offering those types of services to clients. As a result, the ability to transition from direct hire recruiting to contract recruiting was rather seamless, especially since he and Marasco used FoxHire as the back-office for their contract placements.

As the back-office service provider, FoxHire handled all of the administrative, financial, and legal details associated with the placements, thus allowing Vogt and Marasco to leverage their time more effectively to recruit candidates and service the client.

As is often the case for direct-hire recruiters who make the decision to add contracting to their business model, there is some apprehension. Marasco was no different. However, Vogt played a major role in helping her to overcome that apprehension. Marasco praised Vogt for his help and assistance during the process.

“There was a huge fear factor on my part when it came to contracting,” she said. “But Bob is an expert at contracting. He knows how to go into the client, listen to what their needs are, and give them confidence about what can be done about their situation. Bob is very forward-thinking. He has the ability to know what his clients are going to need, even if they don’t know in the beginning, and he shares that information appropriately.”

FoxHire also alleviated her fears by providing her with marketing documents and handling all the behind-the-scenes tasks that are required for a contract placement. “When you use FH as your back-office, they quickly address all the contractual issues with the client and all the employment paperwork for the candidate,” said Marasco. “Plus, the candidates love the fact that they get paid weekly and have access to benefits.” As a result, the two have enjoyed tremendous success in placing contractors, and it was easy to switch gears to meet the client’s needs and thrive during this economic storm.

An interesting twist… with more money
Nine contract placements in a two-month span represent a substantial amount of cash flow, even in a split placement situation. That cash flow is very important during a time when direct-hire job orders are few and far between.

However, here’s where the story takes an interesting twist. After bringing contractors on board to finish projects, companies are using the contract period to accurately assess the contractor’s skills and determine if they would be a good fit as direct-hire employees. In many cases, the contractors are indeed good fits, and the companies are making the decision to convert them to direct-hire employees.

The really good news for Vogt and Marasco is that there’s a conversion fee involved in the process. In other words, the company pays a fee once they decide to make a contractor a direct hire. So in essence, the recruiter (or in this case, recruiters) is paid twice for placing the candidate once. They receive steady cash flow based on the hours the contractor works during the life of the assignment, and then they’re paid a conversion fee when they become a direct hire. (The amount of the conversion fee is dictated by the conversion fee clause in the contract with the client company.)

According to Vogt, contract-to-direct is becoming very popular with his clients at the moment. In fact, they’re hiring candidates on a contract basis with the intention of eventually making them a full-time employee. This is a trend that Vogt believes will continue.

“Direct hire is getting better, but there are still more contracting job orders,” he said. “Things are moving toward a contract-to-hire situation after three to six months. I think that’s going to be predominant for some time now.”

Second, Vogt has already received a few direct-hire job orders from companies, specifically those where he and Marasco recently placed contractors. This is also a logical progression. Since Vogt and Marasco were able to help the companies with their contract needs, company officials are more likely to trust them with their direct-hire needs, as well. So during a time when direct-hire job orders are scarce, these two recruiters were able to generate such orders by placing contractors at the companies first.

Don’t get caught in the rain
When the economy will officially rebound is anybody’s guess. However, recruiters don’t have to hunker down and wait out the storm. They can be proactive by adding contracting to their business model and offering contract services to their client companies.

“Three or four months ago, things were dead,” said Vogt. “Things are getting better, especially on the contracting side. It’s going to take a while [for things to come back all the way.] But projects are getting initiated, and companies are looking to add people for their projects.”

You can provide those people through contract staffing. Call FoxHire today at (330) 454-3508 and ask to speak with a Contract Administrator. In a matter of minutes, you can learn about the different options available to help you grow your business.

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