Today we have a guest editorial from Andy Warren as Steve is out of the office.
Contract to hire (also sometimes called temp to perm) is the technique where employers interview candidates for a position and when they find someone suitable they hire them as a contractor for some period of time, usually 90 days. Why do companies do this? And is it good for the prospective employee?
Hiring and retention are key parts of a manager’s job and always part of their review. They get dinged for not filling vacancies and they get dinged for bad hires, the latter making them reluctant to fire a new hire because it implies they made a bad decision (and to be fair, because firing someone sucks). They want to hire the right person but often get it wrong. Why? It’s rarely lack of effort, it’s just a hard task.
Employers have looked at the patterns and decided that the answer isn’t more training in hiring, it’s having more time to evaluate candidates doing the actual work, and it’s about changing the dynamics of a bad hire. Contract to hire solves both elegantly. Contract workers (temps) are meant to fill a gap and a gap even partially filled is better than not. Contract workers don’t have to be fired because the contract has a fixed end date. Managers get to see someone in action for a while and then make a decision about hiring them, with only that final decision showing up on their annual review scorecard.
The downside is that it makes it harder to hire someone already employed elsewhere. Few permanent employees are excited about jumping into a contract with no guarantees and no benefits. You can make the argument that if an employee making the leap has the skills there is little risk but it’s not guaranteed. Market slowdown, change in managers, or anything else can cause things to end when the contract does.
The upside for the new contractor is that it’s a chance to try out a job and re-evaluate it at the end to decide if they want to stay without the fear of “too many job changes” showing up on their resume. They can just say “did contract work” and that both feels better and has no negative impact with the next prospective employer.
If you decide to take a contract to hire don’t be shy about negotiating. Ask for a review at 30 days and another at 60 days. Ask for your contract time to count towards seniority. Make sure the contract rate includes enough to cover your salary plus any holidays plus your costs for benefits (medical, vacation, your share of taxes).
One final point. If you feel like you’re a good fit for the job being willing (or even suggesting) contract to hire is seen an expression of confidence and it makes things easier for the hiring manager. It might just tilt things in your favor.
