We are in the midst of the tightest labor market in 50 years. The number of open jobs is more than the number of people unemployed. The quit rate is the highest on record. The IT talent shortage is affecting nearly every company. This has increased the pressure to lock down top talent. The IT industry is expected to fall short of future demand by 4.3 million tech workers in 2030 and competition for the available top performers will be fierce. However, the rush to hire full-time employees without considering soft skills and culture fit comes with its own problems, risking a bad hire that can cost $14,900 per person.


What’s the happy middle ground? In our experience, it’s pursuing contract-to-hire employees rather than permanent placements. Though some businesses approach the tactic with trepidation, the following benefits make an IT consultant a safer and more rewarding arrangement.


You Reduce Your Employment Expenses

Insurance withholding and benefit allocations contribute a considerable amount to bad hire expenses. Though providing top performers with incentives is effective for employee retention, it’s logical for companies to limit these benefits to candidates who distinguish themselves by their performance and long-term alignment.


Working with contract-to-hire tech professionals gives you the time to gauge their aptitude at a fraction of the cost. The length of IT contracts does not create coemployment issues the way most people imagine, so your business has more than enough time to give new hires careful consideration before making them full-time employees. Outside of gauging their technical knowledge, contract-to-hire arrangements enable both you and the tech professional to decide if they’re a good fit for your company’s unique culture. While “culture” can often feel like an overdone buzzword, when it comes to employee turnover due to poor culture fit, it can have real bottom-line impacts – costing businesses around 50-60% of a permanent employee’s annual compensation. At the risk of sounding cliché, contract-to-hire arrangements offer a chance for you both to test the waters. You can take your retention efforts up another notch by working with a technology staffing firm that provides competitive benefits for their consultants, you get the benefit of higher retention without the added expenses.  


You Satisfy Hard-to-Fill Roles Faster

Not every position is easy to evaluate beforehand. Though you can run some coding tests to gauge full stack developer skills, it’s not quite so easy to test for other specialties (think a business analyst skill set or cybersecurity skillset). And if you are attempting to harness rare technical capabilities like machine learning and data visualization, you need to hire almost as soon as you start up your conversations with a candidate. In fact, waiting to make the perfect permanent placement is an act of self-sabotage that cuts productivity in the meantime and limits your deliverables.  


A contract-to-hire opportunity can help to capitalize on a tech professional’s availability. You can hire top talent quickly, scale up their output, and see their real-time effectiveness in your roles. For Business Analysts, you can review the impact of their findings and their quality testing. For Cybersecurity professionals, you can see their performance beyond cybersecurity assessments to their first-hand ability to audit systems, fortify user authentication, and protect data assets. Whatever the position, you can test their full technical capabilities first-hand before pulling the trigger.


Your Employees Can Help with Screening

Your team is indispensable when evaluating potential candidates for culture fit. They know the values, skills, and temperaments needed to thrive within your organization. If you include them in your decision making, you can consistently select higher quality people. The only drawback is that they don’t always have the time (with work or hiring timelines) to make an accurate evaluation in the brief window available in today’s market.


Hiring an IT candidate on a contract-to-hire basis offers your people far more time to make a rigorous appraisal. You still evaluate the IT consultant using your own data-driven recruiting strategy and your team is able to identify how a candidate measures up in practice. By regularly asking them about the new person’s performance, you can get a sense of that consultant’s evolution over time and their long-term prospects with your company.


Want to learn more about the benefit of contract-to-hire employees? Contact our team to discuss all the options for your next amazing hire.



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