The traditional model of recruiting – a drawn-out process seeking permanent hires – is woefully, fundamentally broken.
Operating on a broken system isn’t just painful for organisations. It hurts quality candidates, too. It takes too much time and money, then fails to properly gauge employee-employer fit and realistically assess a candidate’s skill set for the job. For many recruiters, hiring is now little more than a numbers game, powered by a “spray and pray” strategy that screams inefficiency. That strategy didn’t work well back then, and definitely won’t work now.
Thankfully, we’re seeing a new model that, when executed in a fair and transparent way, actually makes sense for both sides of the marketplace.
Organisations hold interview after interview to get a sense of how the candidate will add value once they’re hired. But the biggest indicator of how well a candidate will perform on the job is…how well a candidate performs on the job. We know, a truly ground-breaking insight. Everyone knows the real proof is in the pudding. The thing is, many forget that it’s quite easy to see the proof ahead of time.
It’s safe to say that recruiting could use some improvement. That’s where the contract-to-hire model comes in. By upgrading to a contract-to-hire model, organisations can take advantage of the booming freelancer ecosystem and hire professionals on a temporary basis before considering them for full-time employment.
What about the other side of the equation? There’s good news there, too. Contract-to-hire makes sense for skilled talent. The trial period gives them time to consider whether the employer is a good fit for them and their services, before they make their own commitment.
Supported by clear, two-way communication on expectations and timelines, this recruitment process moves quicker, costs less, and the realities of the job (as well as the actual skill level of the worker) come to light a whole lot faster.
For organisations, one of the best parts about recruiting contractors is getting rid of the fixed costs of traditional hiring. Now you can experiment with variable costs, and enjoy a much shorter process, eliminating the multiple rounds of interviews required to build confidence in a permanent hiring decision. Think of the final interview as the contract period itself. That’s the best way to assess whether someone can actually do the work. There’s absolutely no reason to create a long recruitment experience with contract-to-hire. Unless, of course, you have nothing better to do and want to risk losing the candidate to a more agile organisation.
A shorter interview process reduces the time lag as teams gather to discuss the candidate’s credentials, while the candidate twiddles their thumbs, waiting to hear back – a lonely time, as well as a ripe time to start considering other opportunities. As the contract-to-hire model mostly taps the independent market, remember that great talent gets snapped up quickly.
In addition to the general employer benefits of contract-to-hire, there are certain situations where the model truly shines. When an organisation is struggling to attract talent, venturing into a new business area, or scrambling to fill urgent hiring needs, the flexibility and trial period of the contract-to-hire model can offer a huge leg up. Additionally, contractors can support teams that are restricted by headcount freezes — yet still expected to deliver on significant objectives. Isn’t “do more with less” the rallying cry across industries lately?
On the other side of the marketplace, contractors are also reaping the rewards of the updated hiring model. Recruiting is a two-way street, and individuals need time on the ground to get a true sense of the work and workplace culture.
Many companies would be taken aback by how picky talent in sought-after skills areas can be, though this shouldn’t come as a surprise. Most contractors work for themselves precisely because they’re picky, prioritizing their desire to work on their own terms. Their standards can be high and specific for short-term work, and even more so for permanent roles.
In this new hiring model, talent can take the time to assess whether they see this organisation as a place where they can do great work and grow their skillset.
Plus, the trial period offers the contractor an opportunity to create value for the team within a set timeframe. There’s a clear sense of what needs to be done and how their contributions fit into the larger organisation. They can then use their performance on these deliverables as leverage when negotiating a full-time offer. It’s much easier, and much more useful, than trying to convince a hiring manager of their value based on (tough to verify!) details from past performances, elsewhere.
By definition, the outcome of the trial period is uncertain for both parties. To ensure both the organisation and the individual reap the benefits of the contract-to-hire model, it’s important to be direct and honest. Organisations need to be upfront about topics like:
On the contractor’s end, the individual should say whether they’re seeking eventual full-time employment, or want to remain independent. If they’re looking to go full-time, do they want to keep working independently, or are they hoping for deeper team integration?
Answering these questions isn’t enough; these details need to be put into writing. The contract should include language outlining the exact deliverables expected from the independent worker, as well as if, how, and when the option for full-time employment will be considered.
Employers also need to be clear on how restrictions for full-time employees, such as non-competes, translate to the temporary, independent worker.
As the pool of independent workers surges and more and more employers seek cost-efficient recruitment strategies, contract-to-hire stands out as a win-win model. It can be especially advantageous in industries that struggle to attract talent, organisations cautiously investing in new business areas, or teams that need to hire ASAP.
When supported with clear communication from both parties, contract-to-hire serves as an example of agility, efficiency, risk-mitigation, and transparency. It’s the fastest way for both parties to make the right decision on the best place, and the best people, to do the work.
Should you have any questions on the article or want to discuss how Outsized can help your organisation execute agile talent models at scale, please get in touch below.