Why "Temp to Direct" is the worst way to go

I'll make this quick:  Temp to Direct is a bad choice.  It's a "we really want to hire someone, I think, but it would be great if we didn't have to make a firm decision - so let's roll a few unemployed people through here and see if someone knocks it out of the park."


Dear Client - here are your choices:  Unemployed people who have no other choice or contractors who will happily "pretend" they "may" be interested in a full time role.


Contractors contract.  Full time people like "full time" positions.


If you are telling me you want someone who will accept a full time role, then most likely you're going to be sorting through the unemployed crowd.  Not that there's anything wrong with that.......but you don't really think a professional, gainfully employed, is going to roll the dice on a 90-day contract do you?  Seriously?


"Try before you buy" is good for some products I guess.  Cars. Job Boards. McAfee softare.  That kind of product doesn't really have a choice.  But people do - and if you want to HIRE the best - then HIRE the best!  While "temp to direct" might be the easiest way to sneed a recruiting fee into the budget - you're not "sneeking" a top, full time player onto the team. 



Views: 2686

Comment by Bill Schultz on May 20, 2013 at 3:20pm

I'm not sure it's even less expensive.   Staffing firms where  I've worked, it's pretty much even between the perm fee and the temp charges with conversion fees.  And then you have to have the "how much are you paying her hourly compared to what you're billing us" talk with the client.  Always a fun converrstion.  

Comment by Linda Ferrante on May 21, 2013 at 11:40am

We use the Trial Hire option as a financial alternative to the direct hire fee.  We make sure to educate both candidates AND clients on the ramifications of the trial hire, but for financial reasons, some companies opt for it.  Our positions average $67k starting salary (not all minimum wage or entry level earners) and I've hired employed people.  Not once have I lost a candidate due to the 'trial hire' designation.  

In addition, each position has a specified Conversion time frame.  We work with the clients as the Conversion time approaches to put together the offer letter for the employee.  More often than not, the employee receives an offer higher than where we originally started.  Our salaries are completely on track with the market rate, too.

It's in the presentation of the position, the honesty in communication and reputation of all parties involved.  The caveat I will make here is that if the employee will have access to a company's financials, bank account numbers, personal info of the owner, etc, then I INSIST they be on that company's payroll for liability and security reasons.  

Comment by Mitch Sullivan on May 22, 2013 at 3:21am

All jobs are temp to perm, if you think about it.

Comment by Daren J. Mongello on May 22, 2013 at 8:23am

@mitch: Think you'll close candidates with that line?

Comment by Tiffany Branch on May 22, 2013 at 11:57am

TTH makes sense in high turnover positions. I love them for reception, warehouse, administrative staff, call centers, etc. Usually, these are folks that I find myself and we payroll through a third party. It is also a good alternative when you have an immediate need and someone needs to be in the role quickly but you don't want rush to hire.

Also, may companies go that route when they can't get a perm headcount approval, but need someone. They will keep the person as "contract" until the new fiscal cycle or budget approvals. Paying an inovice doesn't go on the books in the same way a perm ee does.

Comment by George McRobbie on May 23, 2013 at 12:29pm
I completely agree. I am not an employment lawyer, but my understanding of permanent employment contracts is that for the first 6mnths (and longer?)) there is not much stability anyway so I question the point of temp-perm contracts for companies in the first instance (please feedback if I have got this wrong!) However, I think as employers and recruiters we need to be honest with the candidate on the likely length of the job role (Perm, Contract or Temp) and let them make that decision. "Temp" signals that the role has a shelf life, but the salary and benefits can sometimes be better than if it was offered as an outright contract. It should be a candidate-driven decision, even if we don't like the answer.
Comment by Tiffany Branch on May 23, 2013 at 1:54pm

@George, the benefit is the cost of "payroll" on the books. I am not a financial person, but I've always been told it is cheaper because you are not paying benefits (health and welfare, unemployment, worker's comp, etc.). Somehow being classified as a non-payroll expense is cheaper.


In addition, if a person isn't performing, you don't have to go through the hassle of PIP's, documentation, etc. You just call the agency and tell them to tell the temp/contractor that there last day is xyz. Where a new perm hire, you have to go through the motions. Some companies, even within the first 90 days, will still require docuementation and info showing that a manager had discussions with the ee regarding performance, etc.

Comment by Kristy A Oliver on May 24, 2013 at 8:35am

Okay-I have had many successful CTP placements with high level developers who were not unemployed.  However, the work involved in easing their fears was way more challenging than it needed to be.  My clients would only choose this option for cost purposes, wanting the rock star type, but not able to afford a direct hire fee.  So....what I'm saying is, I agree, although it CAN work, the effort involved in selling the candidate is so not what I want to spend my time doing.

Comment by alison nydick haller on May 25, 2013 at 1:40am

Oh yes those nurses especially the per diem and temps at Nassau Hospital.Although a coice, nursing as opposed to many other professions,has historically offered high salaries and manageable shifts backed by strong union support so they rarely end up as Daren Mongello stated in Loser positions as perdiem or even in travel capacity,Traditionally and to present day,nursing has enjoyed financial security that rivals few other professions and competitive salaries and retirement and health care packages unlike the social work profession whixh is extremely unerappreciated,totally underpaid,under valed with no union represetationThey are one of the few professions where their hourly rates of pay have been cut as each year goes by.

Comment by Stephen Nehez, Jr. on May 28, 2013 at 11:45am

Smile, nod, and run the opposite way.


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