Hiring: Contract or Direct-Hire?

 In Blog

If you’re looking to hire staff, there are a number of ways you can build your team. You can create a permanent role, known as a direct-hire. Or you might only need the position for a given amount of time, known as a contract role. In another scenario, you may contract a role that develops into a direct-hire position upon completion of the contract. We will talk about what makes each job type different, why it works this way, and how employers can use each method successfully with staffing firms.

Contract

First on the list is the contract/contracting role, an approach to hiring that has grown considerably in many industries over the past few years.

The What

Organizations use contract roles to hire candidates with specialized skillsets. Most often, these positions are filled in order to complete a project or assist the company’s current staff through a busy period of time. Some last only a few months while others can go on for years at a time. Contract roles in some capacity have been a part of business for a very long time, but recent events and innovations have accelerated their use across a number of industries. Staffing firms most often fill and maintain these roles, which directly employ the individuals as consultants under their own payroll. 

The Why

The concept of contract roles works well for companies that experience volatile shifts in operation needs. This can save resources and also prevents unexpected or poorly-planned layoffs. These roles also take the burden of payroll away from a company, outsourcing it to the firm supplying the contractors. This can be especially helpful to companies with smaller bandwidth, since they can operate with a larger staff and only have to focus on payroll for their direct-hire positions.

Hiring and payroll procedures can be taxing or even risky for a company, especially as the roles-needed increases. There can be co-employment liabilities associated with contract work that can put the business in jeopardy if not expertly managed. A new law in California, AB5, brought explicit definitions to independent contractor employment and requires that companies prove these contractors are uniquely skilled, official, and self-managed. This legislature may very well become standard nationally, tightening the protocols for co-employment. Why then would a company expose itself to such dangers and complexities? Well, they have a secret weapon called staffing firms. These agencies take the burden and liability of payroll off of their clients, providing easy access to contracted professionals. 

Aside from risks, finding the right people for your position takes time, energy, and an in-depth knowledge of your industry. This is another pressure that staffing firms alleviate with the help of their talented recruiters. Not only will candidate search be expedited, the onboarding process will also be supportive and efficient the whole way through.

Direct Hire

Direct-hire is the traditional approach to hiring staff and what many people think of as a typical job. It’s usually indefinite and falls under the payroll and direct management of the company itself.

The What

Direct-hire roles are a bigger commitment to hiring staff, and as such, typically demand more rigorous deliberations and candidate strength. Higher levels of experience and credentials are associated with direct-hire roles, though as with contracting, there are exceptions. Some industries, like retail, will opt for direct-hire at entry-level roles due to their unique business models and workforce demographics. However, many industries like tech and healthcare maintain a reasonable loftiness to their direct-hire offerings, using them primarily to staff senior management. This means businesses need a comprehensive search and evaluation of candidates, which can be difficult and costly if done internally.

The Why

Direct-hire roles can be critical to building a company. These positions indicate a permanent future at a company and help you grow trusted and dedicated senior management. They can also be a good choice to staff less-expansive positions that have expected demand or non-transitional workforces.

Companies must extend more focus and effort into direct-hire roles compared to contracting positions, but they can turn to staffing firms to take on the initial work. While they typically hand over the ropes after candidate search, staffing agencies can still be extremely valuable at that stage. Finding the right senior management for your company can take a lot of time and understanding of your hiring goals. Your business may be able to handle this, but a staffing firm can find you qualified professionals quickly with a robust vetting process. This means more time and resources to focus on your core business (the reason you do this thing!).

Contract-to-Hire

Some companies also choose to combine the practices. They will open a contracting role with the intention and communication that there is an opportunity for direct-hire after the duration of the contract. Companies will usually grant this upon exceptional performance and alignment with company ideals throughout the contract period. They will employ staffing firms to find candidates, onboard and manage them throughout their contract, and then hand off management and payroll to the business if selected for direct-hire.

This can be especially useful for heavily nuanced industries and companies that are gradually building their management teams. There is less urgency and commitment involved with this approach to management hiring compared to using direct-hire approaches immediately.

What blueStone Offers

blueStone Staffing Solutions is a staffing & recruiting firm, equipped to provide contract, contract-to-hire, and direct-hire services to your company. Our recruiters have a deep understanding of staffing practices and the industries they specialize in. Whether you are looking to fill a direct-hire, contract, or contract-to-hire role, our team will find the best candidates we can as quickly as possible.

About Us

blueStone Staffing is a Certified Woman-Owned IT Staffing Company. We were founded in 2002. One of North America’s premier staffing firms, we assist mid-tier to Fortune 500 clients. We find talented candidates that can help complete your project on time and within budget. Our company is transforming the staffing industry. blueStone has excelled over the last 19 years, becoming the vendor of choice for many of the Fortune 1000 companies located in the United States. We hope to be the consultant that you trust your professional IT project needs to! We will surround you with meaningful attention. Our team creates long-term relationships with our clients, candidates, and associates. In brief, we help great people execute their vision.

Secure Top Talent Now

Contact us to learn how we can help your company fill roles that seem impossible to staff. Or come see us to find your next role!
Phone: 888-363-4800
Email: sales@bluestonestaffing.com

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