Part of what makes contract staffing a little intimidating to recruiters is the jargon that goes along with it. Bill rates, conversion fee, multiplier, Employer of Record . . . the list goes on and on.
One point of confusion for some recruiters who are new to contract staffing is the difference between the front-office and a back-office. It's a very simple, but very important concept that basically explains how contract staffing works from a recruiter's point of view.
The front-office refers to all the tasks someone normally envisions when they think about recruiting. It's marketing your services and building relationships with companies. It's getting job orders. It's locating, screening, and presenting candidates. You already know this part of the contract staffing equation, so you are halfway there.
The back-office part of the equation is what separates contract placements from direct hire . . .and it's the part that often scares recruiters off. Back-office refers to all of the financial, administrative, and legal tasks associated with employing contractors as is necessary in a traditional contract staffing arrangement. These tasks include legal contracts with contractors and clients, I-9s and E-Verify, timesheet collection, payroll processing and funding, state and federal taxes, invoicing and collections, Workers' Compensation, unemployment, employee benefits and healthcare reform compliance, background checks, employee paperwork, and more. It also involves taking on the legal liability that comes with being an employer.
Just reading all of that can be overwhelming, let alone administering it. But you have another option. You can outsource all of these tasks to a contract staffing back-office that will serve as the Employer of Record and take on all of those tasks and liability.
As you can see, the big difference between contract placements and direct hire is the back-office tasks. When you outsource those tasks to a contract staffing back-office, all you are left with is the front-office tasks that you already know like the back of your hand. You can enjoy the steady income, increased placements, and client loyalty that come with offering contract staffing without the administrative burden and liability associated with employing contractors.