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(This is the fourth in a series of blogs that debunks the perceived fears associated with contracting. It includes quotes from two direct-hire recruiters who have successfully added contract staffing to their business model.)

Third Fear—You won’t make as much money with contracting as you will with direct hire.

In many cases, you’ll make more money. In essence, the only difference is the way in which recruiters receive their money from contract placements. Instead of receiving it in one, big lump sum, you get paid for every hour the contractor works. Because of that disparity, it’s often perceived that there’s less money in contracting than in direct hire. However, that perception is just that—a perception. In reality, contract placements are the type of placements that keep on giving, week after week and month after month.

“It’s nice opening up that mailbox every week and seeing that FoxHire check in there. I had one employee at a client on what was supposed to be a short-term assignment, and it turned into over a year before they eventually hired him. I hadn’t even talked to the candidate for six months at one point, but the checks kept coming.”

Dave Sgro of True North Consultants, Inc.

“We’ve averaged $47,000 a year for the past five years, and we haven’t really worked contracting very hard. It’s a supplement to our perm business. Our current contract business is like having another perm recruiter working in our office producing $125,000 in perm billings—$47,000 to $50,000 is about what we would make on this perm recruiter after commissions, royalties, health benefits, and other overheads are deducted.”

Mike Petras of FCP of South Bend

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