With the national unemployment rate remaining the lowest it has been in 17 years at 4.1 percent, companies have to develop new ways to innovate and stay competitive. One of the ways to do so has been to increase the amount of contract talent utilized in the workforce. A recent trend that we have been seeing is the concept of contract-to-hire. By leveraging the contractor’s unique skills while anticipating on onboarding the contractor, companies are able to move more effectively and efficiently to accomplish their goals. In this blog, we’ll take a look at the balance between the pros and cons of a contract-to-hire strategy.
As noted in our previous blog, “Looking at Talent From the Inside Out”, contract talent makes up about 26 percent of the workforce, with an expected increase to 43 percent by 2020. According to a recent CareerBuilder survey, 46 percent of employers plan to hire contract talent, up from 32 percent in 2017. In addition, 60 percent of employers currently have plans to transition temporary or contract workers into full-time roles.
Just as in a scale, one side is either higher, lower, or at equilibrium. We have analyzed a few pros and cons regarding this strategy:
How Contract to Hire Benefits Employers
- Choosing a contract-to-hire strategy offers a mode to assess the employee’s skills and cultural fit within an organization prior to committing to a full-time arrangement.
- A contract-to-hire opportunity allows a company to test out their staffing strategy or job duties/description to see if a position is properly placed, needed, and functioning to optimize results. If not, modifications can be made with fewer legal impacts than if a position were a direct hire.
- A contractors’ talents and ideas can help a company to see how much more a role could do for the organization, thus assisting with continue to develop honing a position before it is finalized.
How it Benefits Job Seekers
- Contract jobs are great opportunities to expand professional networks. Given that contract positions are typically short term, they allow for opportunities to meet many individuals, opening up more opportunities at a later date.
Contract-to-hire offers workers a way to test the opportunity and company culture to see if it is a good fit before committing to direct employment.
- Contract-to-hire could give a contractor the opportunity to showcase their skills, and assist with carving out a more customized direct hire position that fits their passions and talents, if a company is in a position to collaborate and be flexible.
- Contract-to-hire employees are able to gracefully decline full-time positions if they are no longer interested in the company, allowing them the flexibility to make changes if necessary without the potential stigma that a short lived direct hire situation could present on a resume.
Here’s the Catch
It is very important for the employer to consider the availability of workers for specific roles. When the unemployment rate is already so low for certain positions and nearly all potential prospects are fully engaged in other opportunities, finding a contractor might be just as difficult as finding a direct hire. In this tight labor market, and especially for companies in need of employees with highly specific skills, it is important to engage any and all effective resources to ensure finding the right fit for your role. If you find yourself in a talent crisis, contact us at 612.703.4236 or email. Talencio has been the preferred provider of vetted, accomplished professionals to the Health Technology Community for over 10 years.
Written by: Isaac Pirk, Talencio intern and student at North Central University, Minneapolis, MN.
Another related blog that may be of interest is: Have Your Cake and Eat It Too!