Contract-to-Hire may be the new way to hire.. but is it efficient?

Traditionally, there were only two ways; Full-time hiring and Temporary Contract for specific projects. It appears that Contract-to-hire is “the new way” for companies to hire employees.

So what is Contract-to-Hire?

Contract-to-Hire is way of hiring where employers can hire a contractor for 3 to 6 months and convert them to full-time. It is a great opportunity for both employers and candidates to "try before you buy". I know we've all made bad hires in the past, so CTH would essentially eliminate the ability to make a bad hire.

Is Contract-to-Hire Efficient?

It might sound like an effective way to hire, but it's not. In fact, it is the least efficient way to hire a full-time employee. I will show you WHY using The 3 Bucket Model below..

The 3 Bucket Model

To paint a better picture of the hiring process, I will compare it to fishing. There are 3 buckets of candidates available fish from - the employed, unemployed, and true consultants. As an employer, your job is to catch a fish (hire someone) fast and efficient.

Full-Time:

When hiring full-time, you are able to fish from 2 buckets - Employed and Unemployed. Don't waste your time trying to hire a consultant. They are consultants for a reason.

Temporary (Contract):

When hiring a Temp, you are able to fish from 2 buckets - Consultants and Unemployed. Available consultants are either ending a contract or seeking a new project. 99% of the time, someone will not leave a permanent position for a contract job.

Contract-to-Hire:

If you are going the Contract-to-Hire route, the only bucket you can fish from is the Unemployed one. Keep in mind that this bucket in the picture is not to scale. It is a lot smaller (4.9% Federal Unemployment Rate).

To conclude, Contract-to-Hire is the worst possible way to hire someone full-time.

So what to do?

Trust the 3 bucket model and separate permanent hiring from contract hiring. This is not a belief or a theory, it's REAL. If Contract-to-Hire seems to work for you, that's great. But I'd be lying if I told you it was the best way to hire. My intent in this article is to make you, as the reader, understand the WHY behind some of your hiring struggles.

About Me

I am an Account Executive at Robert Half Technology. My role is partnering up with local employers in the Greater Boston Area to staff consultants for specific projects in order to meet a business objective. As a subject matter expert in Technology Staffing, I also educate employers on current market trends by providing real-time data.

No room in your budget to hire a Technology professional? I can hire them on my team and loan them to you through Robert Half's SPS Program - Check it out