Contract-to-hire: A flexible approach to hiring

Businesses need to get ahead of the competition by hiring the best talent. Recruiting skilled workers in a rapidly evolving business landscape has posed several challenges. In India, businesses are looking at a gaping skill gap of 21 per cent in the tech sector alone. According to a global workforce survey by PwC, The Great Resignation is set to continue, with one in five workers expected to switch jobs in the next 12 months. Employees are concerned about compensation packages and accept jobs only in companies that fulfil their promises. They also expect flexibility, work from home options and support for healthcare and welfare. It is clearly an employees’ market. On the other hand, companies need employees to be multi-skilled; they have higher expectations of employees. In a post-pandemic hiring scenario, companies face the unique challenge of having several job openings but struggling to find the right candidates. They need to attract the best talent while at the same time meeting urgent talent requirements.

Acquiring the best talent

Resource requirements can be met with direct hire or contract-to-hire. In direct hiring, companies can hire employees directly and bring them on the roll by making job offers to the candidates. The company is responsible for compensation and benefits for the employee.

Companies can recruit people by themselves or hire staffing agencies to find permanent employees.

In contract-to-hire, the employee is placed in the company for a pre-determined period of time but is employed by the staffing agency. At the end of the contract, the client company has the option of hiring the employee full-time, that is, bringing the employee on the roll, or terminating the contract.

How contract-to-hire works

Contractual hiring is on the rise as it gives companies the benefit of reducing overheads and speeds up the hiring process to meet urgent requirements. In contract-to-hire, companies connect with a professional staffing agency that manages the hiring process. The staffing agency does the groundwork of screening resumes, sourcing and shortlisting candidates. The final interviews and selection are done by the company, with the staffing agency giving input, if necessary. The selected candidate is hired on contract and is on the payroll of the staffing agency but is placed in the client company. At the end of the contract, the client company has the option of hiring the candidate or terminating the contract. The period of the contract can be anything from a month upwards; it all depends on the requirements of the company

Several functions across industries lend themselves well to contract-to-hire roles — IT, process management, sales, administration, graphic design, seasonal retail, etc. to name a few.

When you should consider contract-to-hire

Direct hires are beneficial to the company because they are committed to the company’s culture and values, and the company has more control over them. However, direct hiring is a time-consuming process as organisations need to find employees who have the right skills as well as a cultural fit.  

Contract-to-hire engagement works very well for short-term skill requirements. Hiring contract workers gives companies the ability to hire skilled workers for specific projects. Even though permanent employees may be capable of performing the said job, training them can be an expensive and time-consuming proposition. In such situations, contract-to-hire covers skill shortages. When time is of the essence, hiring contract workers with the right skills and experience results in quicker onboarding and productivity from day one.

SWith a professional staffing agency doing the groundwork, the company can focus on selecting the right candidates, resulting in a speedier hiring process. Companies get to observe the employee on the job, understand their strengths and assess whether they will fit into the company culture if hired as a full-time employee. That being said, contractors may have a lower commitment to company processes and a lack of focus on the company vision. However, these disadvantages are amply made up for by the vast number of benefits of contract-to-hire  

Contract-to-hire offers companies the benefits of staffing flexibilitycost-effective hiring and the ability to scale up or down quickly, based on project requirements. Careernet Flexistints, a professional staffing solution, helps organisations find specialised talent for short-term engagements. In a dynamic business environment, contract-to-hire gives companies the ability to remain lean and agile while still being able to acquire the best talent.