Contract-to-Hire

You may have noticed ads for contract-to-hire positions. This type of position is becoming increasingly popular. What this means is that a company will contract the services of a potential employee. If the contractor performs well and there’s compatibility, the company may extend an employment offer. If things don’t work out for whatever reason, either party can terminate the contract at any time. No explanation is necessary. Legally, neither party has to give notice of the termination.

Companies used to hire employees on a 90-day probationary basis. Contract-to-hire is taking the place of that probationary period. There’s less red tape, especially for larger companies, which normally have to keep detailed records of any incidences dealing with an employee before letting him go. Contract-to-hire eliminates all those responsibilities.

Some companies may advertise directly. However, in the majority of cases, this is done through a third party agency or a staffing company. Staffing companies recruit potential employees, and match them up with companies. If the applicant receives an offer for a contract-to-hire position, he goes on the staffing company’s payroll until the trial period is over. Normally, this is a 90-day period. If everything works out well, the hiring company extends an employment offer to the applicant (contractor). If he accepts the offer, he gains employee status. At that point, he goes on the company’s payroll and receives all the benefits offered by the company. If, for whatever reason, the hiring company does not extend an employment offer at the end of the trial period, the company can request a different applicant from the staffing company. The contractor is now free to go on other interviews or contract with another company.

One positive point is that neither party has legal obligations toward each other and can terminate the contract at any time. This aspect is good for both parties. However, the negative aspects affect the contractor more than the company.

For example, there is always the possibility of not receiving an offer for employment. The company may decide to keep your services on a contract basis. During this time, there’s always the chance that the contract will be terminated.

There have been instances where a company will bring on an applicant on a contract-to-hire basis, and by the time the trial period ends, the company’s budget has changed and is not able to extend an employment offer. In other instances, the company may decide that the position is not needed after all. Although these are not common scenarios, it has happened.

Another drawback is that you don’t have any benefits while working as a contractor. If the company is undecided about hiring you, you may go without benefits for an indefinite period. This may not be too bad if you have health benefits through your spouse. Some people don’t mind this while others have to have the benefits. It depends on your individual situation.

Another negative is that your compensation may drop once you change to employee status. This is not always the case, but it is a possibility. Additionally, if the position requires relocation, you may want to give serious consideration to the negatives. Would you really want to relocate to work as a contractor and not know for sure whether you will be hired or not?

You may be wondering how staffing companies recruit applicants. They can recruit in a number of ways. They may advertise in newspapers, through job fairs, virtual communities, and online job boards.

You may have seen ads in newspapers for contract-to-hire positions. A majority of these ads are placed by staffing companies to recruit applicants or contractors. They normally don’t reveal the name of the hiring company until they set you up with an interview.

Job fairs are a second method used to find potential applicants. If you’re interested in attending a job fair, you normally find them advertised in newspapers. You may even do a search on the Internet for job fairs in your area.

Online job forums are an effective recruiting method. The service is generally free and does not take very much time to post. The recruiter normally posts the job description, requirements, and the contact information. Applicants generally are asked to send a copy of their resume and a cover letter explaining why they think they are a good fit.

The fourth recruiting method is online job boards. These are similar to newspaper ads, but are placed online at employment sites. You can expect the ads to read much like a newspaper ad.

There are many benefits to using the services of a staffing company. Staffing companies have staffing and recruiting teams. Their job is to recruit, pre-screen, and test individuals. By the time an applicant is sent on an interview, that person has already been tested thoroughly and his skills have been assessed. Staffing companies are interested in keeping their clients; therefore, they work hard at matching an individual with the company or position that best suits him. Everyone wins in this case. The staffing company keeps the client happy; the applicant thrives on his job because he’s capable of performing the duties well, and the hiring company gets a capable, productive potential employee.

Another benefit to using a staffing company’s services is that they are responsible for conducting credit and background checks. Especially if your business deals with sensitive, confidential information, you can feel confident that contractors sent to you have already gone through all the screening checks.

Still another benefit, if for whatever reason you decide that things are not working out, you simply terminate the contract. There is no legal obligation to keep the contractor any longer than you need or wish to keep him. If you are the contractor, using a staffing company benefits you, because if you decide that you don’t want to continue with a certain company, you too can terminate the contract without any legal obligations.

This type of position is becoming more popular and easy to find. If you prefer to seek employment on your own rather than through a staffing company, you can still succeed. You would proceed the same way as with a direct hire position.

Look in newspapers. Make sure that the contact information is for the hiring company and not for a staffing agency. Go to online employment sites and enter a search for the term “contract-to-hire” in your area. Larger companies sometimes have job fairs. You can do a search for job fairs in your area as well, and make sure you attend.

Having your resume ready, your work history, and references along with a cover letter increases your chances of finding a position. Resumes and cover letters take time to put together. If you have these items ready, you can forward them as soon as you see an ad. All you will need to do is update the position on the resume. The cover letter may require a few more updates such as the position, contact person, and maybe their address. Make sure you have the correct date.

Some ads may offer contract work, while others may state contract-to-hire. What is the difference? It’s important to know the answer, so you know what to expect before applying.
Independent contractors or self-employed individuals work on a contract basis. When a company contracts out a project, the contractor is paid for the work done. Some companies may have ongoing contract work, and other times, it’s sporadic or a one-time project.

Contract-to-hire, on the other hand, means that the individual works as a contractor only for a trial period with the expectation of receiving an employment offer at the end of that period. An employee evaluation takes place at the end of the specified trial period, and if his performance was satisfactory, he becomes an employee of the company. He goes on the company’s payroll and qualifies for company benefits. Independent contractors do not have these expectations when they apply for a contract position.

You can find contract-to-hire positions in virtually any business sector. There are contract-to-hire ads for administrative assistants and other support positions. Call centers may extend contract-to-hire offers.

Individuals that work in IT jobs don’t’ have to worry about finding work. IT and other computer contract-to-hire jobs are plentiful. There is a tremendous need for persons with technical skills

Furthermore, you can find this type of position in the financial industry, as well. These include accounting, collections, and banking positions. The insurance industry is another area. You may be able to find work as a claims adjuster on a contract-to-hire basis. You can even find contract-to-hire jobs in the medical field. Actually, you can expect to find work in virtually any field. Due to the convenience of offering this type of employment, more companies are adopting this hiring technique.

If you’re a business owner who is considering contracting the services of a staffing company, there are several factors to keep in mind. Find out what the company’s procedure is for background checks. Generally, the staffing company’s goal is to keep your business, so they are very thorough and detailed in what they do. Nonetheless, it is still important to be proactive and ask questions. A legitimate company will gladly provide all the answers.

Another factor to keep in mind is the assessment test. Inquire what areas they test in and whether they administer personality assessment tests. Personality assessments in particular are important. You want employees who can get along and who are team players. Your employees create your company’s culture, so you want employees with high values and strong ethical practices. Your company’s success is determined to a great degree by your employees.
Inquire about their success rate. You want a company with a high success rate. It is true, however, that if things don’t work out with one applicant, you can simply request a different one. However, it is still an inconvenience and a waste of time. Look for a staffing company with a high success rate to minimize the possibilities of having to request new applicants.

The trial period is a specified period of time during which an applicant’s performance is observed and monitored. The quality of his work is taken into consideration. Can he perform his duties skillfully and proficiently? Does he meet deadlines and is he detail oriented? The individual’s attitude and personality are also important. Companies want employees that can work in a team environment. Working well with others and offering to help others is important in any position.

Being on time is critical. Work hard at getting to work on time if not earlier. This is extremely important. It cannot be emphasized enough. Your trustworthiness is determined based on whether you get to work on time.

At the end of the trial period, which is normally 480 working hours or three months if you work full time, you can expect an employee evaluation. If the company is happy with your performance, an employment offer is extended to you. At the same time, you can decide whether what you have observed during the trial period is what you want. If the conditions are such that you would enjoy working for the company, you can accept the offer. Once you agree on the compensation, you will switch from staffing agency’s payroll to the hiring company’s payroll and become an employee.

On the other hand, if at the end of the trial period, either you or the company is not satisfied, a new applicant is placed in your position. If you desire, you can go on other interviews and start the process all over again.