Can you believe it is the fourth quarter of 2014 already? For many recruiters, this is "crunch time," where they try to close as many placements as possible before the end of the year. But as clients continue to drag their feet on hiring decisions, you may be finding it harder to reach that goal. You can try talking up your best candidates and warning clients about the dangers of long hiring processes, but you can't force them into hiring decisions before they are ready.
There is another possible solution, though: contract-to-direct hire arrangements. These arrangements allow companies to initially utilize a worker on a contract basis and later convert them to a direct hire if they want.
This addresses a number of traditional job order killers, including:
- Hiring freezes and budget constraints - Companies are also are taking a hard look at their bottom lines this time of year. As a result, they may scale back or freeze hiring plans. This can put your current job orders with them at risk, but don't give them up for dead. Sure, hiring freezes and constraints keep clients from hiring direct, but they may be able to utilize contractors because they typically come from a different budget than direct hires. When the budget loosens up or they start a new fiscal year, they may then be able to convert the contractors to direct hires.
- Economic instability - Even companies who are doing well are still worried about the economy, and with good reason. The upcoming Congressional elections could result in total upheaval where there is already political unrest. Employment regulations keep increasing. And no one knows what the upcoming employer mandate of the Affordable Care Act (ACA or Obamacare) will do to the economy and individual businesses. With all these question marks, companies are feeling less than secure about permanently adding to their overhead. With contract-to-direct, they can address their staffing needs risk-free. If the economy does go south, they can end the contracts, but if it gets more stable, they can extend direct hire offers to their contractors.
- The "Perfect Candidate Syndrome" - When companies do need to hire, they seem to be holding out for the “perfect” candidate. Great candidates are being turned down if they don't have 100% of the company's requested qualifications. For recruiters presenting great candidates, this is extremely frustrating. If a client is on the fence about a candidate you believe in, you can offer that candidate on a contract-to-direct basis. That way they can evaluate the candidate on the job. If the candidate is a great fit, the client can then convert them to a direct hire. If not, the company can end their contract and try someone else. This option is increasingly being used by companies to ensure cultural fit.
Besides saving placements, contract-to-direct also gives you the opportunity to make more money. You are paid for every hour the candidate works during the contract period and even more if they work overtime. Plus, you can earn a conversion fee if company hires them direct.
Offering your clients the contract-to-direct alternative can not only help you end 2014 on a high note but also strengthen your relationships with clients, ensuring many successful years to come.
Debbie Fledderjohann is the President of Top Echelon Contracting, Inc.