Benefits and Drawbacks of Contract-to-Hire Roles in IT

Contract-to-hire roles in IT allow companies to hire an industry professional for a shorter period of time with the goal of converting them into a permanent, full-time employee by the end of their contract period. These roles are growing in popularity, with approximately 40% of the U.S. workforce is contingent workers. Furthermore, this number is expected to grow to 50% by 2050.  

Contract-to-hires are designed to allow both IT professionals and businesses to test the compatibility of the hire before a permanent commitment. Below, we break down the different benefits and drawbacks associated with using contract-to-hire roles in the IT industry.  

CONTRACT-TO-HIRE ROLES IN IT

Benefits

Taking a contract-to-hire approach can offer many benefits for businesses, the first one being lowered risk. When utilizing contract-to-hire talent, employers can see a candidate’s performance before full-time commitment. Employers can also see how the candidate will mesh with their team and company culture. Additionally, contract-to-hire can be more cost efficient than an immediate, full-time hire, since businesses face less risk of losing money from a bad hire.  

Flexibility is another advantage of contract-to-hire, as businesses can choose to roll the contractor off at the end of the contract period if the candidate was not a right fit or needs changed. Contract-to-hires also result in a faster hiring process. Hiring contract workers is often shorter, and businesses can use the contract period to decide whether or not the employee is a good fit for full-time employment. On average, hiring for a full-time role takes 44 days, and difficult roles can stay open for 2-3 months. Meanwhile, contract workers can often start within days and, in some cases, as early as 24 hours.  

Above all, contract-to-hire roles can provide a solid middle ground between contract work and full-time hires.  

Drawbacks

While contract-to-hire staffing offers many benefits, there are still some considerations businesses should take into account when making staffing and hiring decisions. For instance, when businesses sign on a candidate for contract-to-hire, they must consider the uncertainty of conversion. Candidates may leave at the end of their contract period to pursue other opportunities if the full-time offer is delayed.  

Furthermore, businesses should map out the costs of contract-to-hire. Contract rates are typically higher than full-time rates, so businesses should evaluate their budget before deciding between contract-to-hire or full-time talent.  

Preparing for knowledge retention is also important. If the contract-to-hire candidate decides to leave at the end of their contract period, businesses need to prepare for the potential gap in knowledge continuity.  

BEST PRACTICES FOR SUCCESS

When businesses are considering contract-to-hire talent, there are some best practices they can implement to help the process flow smoother.  

For starters, clear communication is critical for success. Businesses should communicate the expectations and timeline to the candidate, and how the candidate will be evaluated during their contract period should be defined before they start.  

Contract-to-hires should be evaluated for their skills, performance, and cultural fit during a contract period to determine if they are a good full-time fit. Feedback and check-ins are also important throughout the contact period, so businesses should conduct regular check-ins with the candidate to discuss how the candidate is performing and how they fit into the company culture.  

By putting these practices in place, businesses can make the contract-to-hire process more seamless and increase the likelihood of a successful full-time hire.  

FINAL THOUGHTS

Contract-to-hire roles in IT can be a great option for businesses to mitigate risk before staffing full-time employees and can benefit both the organization and the candidate. However, contract-to-hire roles must be managed with clear communication to ensure effectiveness. When businesses utilize the best practices mentioned above, a contract-to-hire approach can be leveraged to build sustainable IT teams.  

If your business is considering contract-to-hire and needs more information on how to get started, contact our team of staffing and recruiting experts today.  

Contributions from Natalie Pollock