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Why Contract-to-Hire Model is Better During COVID-19

A company hiring candidates through contact-to-hire model

The COVID-19 pandemic brought with it a massive wave of downsizing that hit almost every sector of the industry. Businesses around the world started looking for employees on a more contractual basis. The goal was to be able to at least deliver the ongoing projects on time while incurring minimal costs, and guess what, the contract-to-hire model turned out to be their savior.

There are two major ways to hire someone, one is your usual Direct Hire for long-term staffing needs and the other one is the more efficient but short-term contract-to-hire.

Like Direct Hire, contract-to-hire has always been around, offering some of the most skilled employees to businesses around the world and we certainly didn’t need a pandemic to understand their importance, but here we are.

The purpose of this article is to shed some light on this hiring model and why you should be using it right now.  

What is a Contract-to-Hire Model?

We’re sure you must’ve heard about the terms of full-time hire and contract-based hire.

In the former, the employees are hired to work permanently by the employers but in the latter, they work for a predefined duration or on a given project or assignment and are relieved after that.

The contract-to-hire model brings staffing agencies into the picture that freely use both hiring models to supply relevant workforce based on the requirements of the organization.  

Contract-to-hire staffing takes contract-based jobs a step further and adds the opportunity of the employee being hired for a full-time position after carefully gauging their performance during the contract period. Quite several organizations around the globe now frequently use contract-to-hire as their go-to hiring option for instantly fulfilling their ever-changing workforce needs.

Curious to know what are the possible benefits of this hiring model. Read on below!

Paradigm Shift Caused By COVID-19 Pandemic

Pre-pandemic career opportunities were generally on the positive side but the tables turned soon after the pandemic hit. Unfortunately, millions lost their jobs as organizations tried to cope with this, but a few positive things came out amidst all this chaos. Organizations that were reluctant to switch or prefer remote work were left with no choice but to adopt it.

But what about the hiring scenario?

Well, to save money, several organizations quickly went ahead with the contract-to-hire model, which, being a remote job, essentially meant that they got access to a much wider talent pool than they usually had. While we do hope for things to go back to normal, one should not overlook the fact that this also means organizations can now use this model as long as they want, which may lead to fewer permanent jobs.

Benefits of the Contract-to-Hire Model

We know some of you may be thinking that the contract-to-hire process isn’t that rewarding as it can’t help you shape your career, but rest assured as things are vastly different. Both the involved parties, i.e, the business and the job seeker have a lot to gain when it comes to contract-based hiring.

Read on below to find out about the benefits we’re talking about and how they can help you recover as the pandemic slows down.

1. From Business’s Perspective

Sure, contract-to-hire allows organizations to dynamically scale their workforce when required in a cost-effective style but that’s not the only benefit this hiring model offers to businesses. In this section, we’ve covered the benefits of the contract-to-hire from a business’s perspective.

  • Opportunity to Experience a Trial Run

Hiring an employee can be a complex process that usually involves both time and money. You designate resources and manpower to help you find a suitable candidate and at the end of the day, it turns out that the employee would not be the right fit for your organization in the long run. What to do now?

Fortunately, the contract-to-hire model doesn’t suffer from such problems. The model effectively allows you to test a hire thoroughly for a few months before the organization finally decides to absorb them for a permanent job role. Based on the duration of the contract, you can take anywhere from one month to a few months to assess the hire. This results in a drastic reduction in bad hires, saving your company from incurring, or should we say, wasting any additional costs on onboarding and replacements.

  • Businesses Can Assess a Candidate’s Skills & Fit

The entire contract-to-hire model has been built around the idea of giving organizations the opportunity to gauge if the candidate is the right fit for the job role as well as the organization. You can think of the model as an extended job interview.

With this hiring model, organizations can get plenty of time to thoroughly evaluate the skills of the candidate, which will ultimately lead to a reduction in bad hires and the money spent on them.

But organizations don’t just test the skills of their hires during the contract period, they also pay close attention to the fit of the hire. They are eager to know if their hire work style fits with the rest of their team while also striking the right balance in supporting and even promoting the goals of the organization. This is what makes a contract-to-hire probably one of the most sought-after hiring models of the current era.

  • Staffing Flexibility

Not too long ago, we discussed how direct hiring brings in permanent employees into the organization but not every organization is so sure of permanently bringing in new employees into its workforce and paying big salaries and perks to them.

Some just believe that if a job role, or should we say that the required expertise can be fulfilled by a dynamic staffing model, why not go for that?

This is exactly what contract-to-hire offers.

With this hiring model, organizations can instantly tap into a pool of some of the most skilled professionals when the challenges begin to ramp up.

Contract-to-hire can give you all the power to dynamically scale up your workforce for a long and complicated project and then scale it back down when the needs have been successfully fulfilled.

This particular benefit also makes contract-to-hire perfect for meeting seasonal or project-based challenges head-on and helps organizations save money on slower seasons.

  • Budget Flexibility

Due to the ongoing financial crunch, organizations are trying their best to steer clear of any superfluous spending that can be avoided.

In an organization, every activity and department is assigned a fixed budget, and exceeding that in times like these can turn out to be chaotic. But with the contract-to-hire process, organizations can achieve a monetary advantage.

Wondering how?

It’s because employers generally pay contract-based hires according to the number of work hours instead of giving them a fixed salary each month.

These hires also don’t receive any of the perks and benefits their full-time counterparts get, although this may vary depending on the staffing agency’s or the employer’s terms. This is one of the major areas where an organization cuts down on its salary expenses. If your organization is also facing budget issues, wondering whether your budget would allow a full-time hire or not, we recommend going for the contract-to-hire to reduce your hiring expenses as much as possible.

  • Fresh Perspective

The contract-to-hire model not only brings in a fresh flow of new workforce but it also brings a barrage of new ideas and creativity to the organization.

When hiring for new positions, generally the first thing that comes to the mind of an HR is to go with an internal hire. And there’s nothing wrong with that thought as it promotes a culture of growth within the organization but there comes a time when an organization feels that it has outgrown its talent pool and needs new insights and perspective on the challenges.

By adopting contract-to-hire, organizations can maintain a steady flow of insights and ideas that forces them to regularly update their way of working and essentially keep the spirit of innovation alive within them, something internal hiring might not have been able to do. It can also play a major role in stimulating current employees to think differently.

2. From Job Seeker’s Perspective

Now that you’ve gone over why businesses frequently go for the contract-to-hire, let’s now switch over to the candidates’ side of things. In this section, we’ll take a look at this hiring model from the perspective of candidates and see what makes it so lucrative for them.

  • Demonstrates Your Expertise and Skills

As an open candidate on the market, you are always on the hunt for opportunities to prove your worth to organizations, and the contract-to-hire model can essentially give you that opportunity.

Employers often use this model to get a closer look at how a hire may perform in the organization in the long run and based on that, they may even offer you a permanent position at the end of your contract period.

So, to effectively showcase your expertise and knowledge to make a more positive impact on your employers, as a candidate, you should use this opportunity to deliver your best performance.

Not only does this increase your chances of getting hired for a permanent job role, but it also ensures your employers that you’ll be the right fit for the organization.

If selected for a permanent role, you can even negotiate a better salary as you’ll be seen as an integral part of the team.

If you are looking for a job in the USA then this job site list will surely help you out in this.
  • Opportunity to Work in Different Environments and Industries

One of the many obvious perks for candidates opting for a contract-based job is that they get to experience a wide range of industries and environments much faster than the ones employed on permanent job roles.

Wondering how?

It’s because contract-based jobs usually span over a couple of months, which gives candidates an excellent opportunity to work with a host of organizations with varying work cultures while also learning a thing or two about handling all kinds of challenges faced on the job.

Of course, you can find a good chunk of people who would be interested in a stable and long-term job profile and may even find this hiring model unacceptable but many other people find contract-based jobs just perfect for them as they can quickly level up their skills much faster.

  • Opportunity for On-the-Job Training

Before we jump on to learn how the contract-to-hire model can give you the opportunity for on-the-job training, let’s find out what it is and how it affects you. Employee training is an essential part of the onboarding process and companies spend thousands of dollars to prepare their newest hires for their job roles.

Most organizations have now switched to on-the-job training that essentially starts you slowly with the actual job that you are hired for and gradually builds up the momentum. 

Benefits of this?

You get to experience your work firsthand and gain the knowledge behind the various tasks involved in your profile, which also develops the skills required. You also get to understand your fellow team members, allowing you to work seamlessly in cohesion. Sufficient on-the-job training also plays a key role in improving your performance, ultimately increasing your work productivity.

  • Expands Your Professional Skills and Network

Photo by Tima Miroshnichenko from Pexels

One of the best things about contract-based jobs is that during the entire period of the job, you not only get to experience the diverse work culture of some number of organizations, but you also get the chance to meet several talented and insightful individuals who can teach you a thing or two about your job.

You can use the opportunity to connect with your fellow team members and add them to your ever-growing list of professional connections. And if you do end up leaving a good impression on your managers, even if they’re unable to offer the full-time position to you, they may be more than happy to set you up with a reference or even a recommendation. The same goes for your team members, they may also be of help in finding you your next job.

  • Opportunity for a Potential Permanent Role in the Company

There are a lot of factors that play a key role in securing that permanent job role you’ve been working so hard for. Some of these factors include taking initiative, putting new and innovative ideas on the table, and building relationships with your team members, along with many others like them.

A solid chunk of these factors are metrics that will be used to measure your job performance and efficiency.

Assuming you gave your best performance while achieving all the assigned targets on time, you can have a fair chance of getting a permanent job role in your organization.

  • Opportunity to Learn an Organization to Find Out if a Company is a Good Fit for the Future

As an employee, it is critical for you to thoroughly assess whether the organization is a good fit for you or not, and with the contract-to-hire model, you can do that.

Contract-based hires should use this incredible opportunity to find out if they enjoy the work and fit in the organization. By the end of the contract period, they should be ready with the decision if they would like to work for the organization for a longer period, as no one likes to get stuck working at a place they don’t like. Unfortunately, no other hiring model, like direct or permanent hiring offers such flexibility to test drive an organization.

What’s Next After the Contract to Hire Period Ends?

So, your contract just ended, which could mean either of the two things.

You were either hired by your employer for the position or you were let go.

Either way, take a minute and think about the things that you learned from this experience and what challenges they helped eliminate.

Hired or not, there are a couple of things that you should do, like setting up a meeting with the recruiter and discussing your life goals and things that you like/didn’t like about the job. You could also ask for a contract extension if you like the organization and want to work for a longer period.

You should always update your resume by mentioning your newly acquired skills and experience and attend local or online networking events to seek better opportunities.

If you were hired, congratulations for making it to the team, and if you weren’t, improve your skills as there are plenty more contract-to-hire positions as well as direct-hire opportunities for you out there. Good Luck!

Claire D. Costa

Claire D. Costa

Experienced technical content writer, skilled at simplifying complex topics for broad audiences. Passionate about crafting engaging narratives and fostering effective communication.

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