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Mar 27, 2014 12:00:00 AM · by David Kushan

Hiring On a Contract-To-Hire Basis

Some companies prefer filling positions on a contract-to-hire basis. These are full-time positions within an organization, but rather than hiring someone straight into the role, the company opts to hire the candidate on a contract basis first. Then, if things go well, the company converts the person to FTE (full-time employee) status.  

This method typically occurs when an organization has had a series of hires that have not worked out. In other words, their hiring process is flawed and instead of fixing the problem (usually because they have not taken the time to identify the problem), they take this alternate route.

That said, I understand why this method can be good for a company. The best way to evaluate a person for a new position is to actually see him or her go about the work required by the new position. Also, it’s much easier for a company to terminate a contract employee than it might be to terminate a full-time employee. Finally, in these circumstances, this evaluation period gives an employer time to see how the new person performs before having to invest in their training.

But has the employer really considered the advantages of contract-to-hire for the person they’re considering bringing onboard? In my opinion, there aren’t many.

I frequently have employers tell me, “This is a way we can both check each other out first, before really having to commit to each other.”

Well, here’s the reality.

If the person you’re trying to hire is currently unemployed, then there’s not much risk associated with their taking your position on a contract-to-hire basis. But being that a contract has an end date, these people are probably still going to be looking for other positions. As far as they’re concerned, they may not have a job at the end of the “contract” period. You may be “checking them out,” but because they’re still looking, they may be off to another organization that’s willing to offer them a full-time position before you’ve completed your evaluation period.

Next, even though “contract-to-hire” may be an acceptable term to a person who’s unemployed, as an employer you have to realize how unreasonable it is to a person who’s currently employed. Why would a person leave their current position to accept a job with you that may not last longer then the contract period? In this scenario, the candidate leaving the full-time job is giving up a full-time job. What are you, the company, giving up?  You’re not even treating this as a full-time hire, and you’ve said as much by the fact that you’re classifying this person as a “contractor” for a specific period of time.

As an employer, understanding that many currently employed people are not going to be open to contract-to-hire terms, you have to figure out how many people you’re eliminating from your candidate pool - and how that may impact the quality of the hire you end up with.

You may also like: Are you a B company looking for an A player?

General, Consulting, Hiring, David Kushan

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