Knowing the Cost: The Hidden Benefits of Contract vs Direct Hire
For most people, the word “employment” suggests a full-time, direct-hire role. It’s just the way things have been done for ages. And why not? Both the candidate and the employer feel a sense of security in knowing that a filled role is permanent. But you can’t deny that the paradigm of work has changed over the last few years. These days, contract-for-hire is often a much better strategy than direct hire, although it is still often undervalued or misunderstood.
For starters, contract work can essentially be viewed as full-time or permanent due to the 40-hour-per-week nature of most roles. And that sense of security I mentioned? It’s a bit of a façade if you really think about it. Getting hired in a permanent role is not actually safer or more secure than a contract role considering the nature of at-will employment. To put it plainly: Nothing is truly permanent or guaranteed.
It’s a talent-driven market right now, so if you’re currently looking for work or your next hire, make sure you understand the hidden benefits of contract employment—and find a suitable staffing partner—before moving forward.
A Better Use of Time
Put simply, hiring a contract employee is faster than going to the direct-hire route. The employer benefits from quickly getting the right skills in place for a project as well as the ability to decide over time if the person is a fit. Likewise, candidates get to avoid jumping through the seemingly endless hoops of direct hire and are more likely to stay interested.
Mitigating Risk
By hiring a contract employee, you effectively take certain risks off the table. After all, it can be litigiously dangerous to have to fire someone if they turn out to be the wrong person. And that doesn’t even include the damaging ripple effects that the wrong personality or culture fit can cause on your entire team. In certain cases, hiring a contract employee can even protect your spending dollars as an employer—certain staffing providers have guarantees in place for this very purpose.
Mind the Bottom Line
Like most things, hiring decisions come down to cost (on the employer and the candidate side). In fact, when a candidate is choosing a job, they may only see dollar signs and little else. Tens of thousands of dollars can be saved across an employee’s tenure by hiring the right person at the right price instead of paying for the right skills with little to no regard for the person.
Actual Benefits
You might be surprised to learn that certain staffing companies offer benefits packages that rival those of permanent employers. In TriCom’s case, we go out of our way to offer the kinds of top-tier benefits typically reserved for direct hires: 100-percent-paid premium medical and dental care, 401(k) instant matching, and many other perks—not to mention that candidates get paid for every hour they work. There’s no guarantee that your staffing partner will offer a comprehensive package like this, but they are becoming more common in the IT industry.
It Matters Who You Work With
We’ve established the ways in which contract hiring can beat out direct hiring. But to fully take advantage and unlock these hidden benefits, you need to find the right staffing partner. Statistically, the rate of failure on hires that are based off interviews is a staggering 50 percent—it’s essentially the same as if you flipped a coin. This is true whether an employer hires someone on a contract or permanent basis, so it helps all parties involved to work with a firm that can offer a streamlined, data-driven approach that saves time and resources.
The right staffing company will work on behalf of the candidate, advocate for them, and offer consultancy over the course of a career. The candidate also gains the ability to view and select from multiple opportunities without having to plant their flag on one hill, so to speak, which is a great way to build industry experience at an exponential rate.
The same is true for the employer. An abundance of time, energy, and resources get spent during the interview process. With seemingly endless hoops to jump through, potential dream candidates can simply lose interest along the way. There’s no end to the mistakes that can be made, and after all is said and done, the traditional hiring process could leave you having to fire an employee if they aren’t the right fit.
The common theme in all of this is that the person is far more important than skills on a resume. If you are an IT professional looking to give contract work a try or an employer looking to bolster your IT roster in the most efficient way possible, make sure you work with a staffing partner that offers data-driven solutions to help you get the most out of contract roles.