To Contract or Not to Contract?

Knowing the business of contract and contract to hire is worth billions of dollars every year, is it worth the risk and time investment for an independent recruiter to start doing contract and contract to hire? And if so, how?

Comment by Jerry Albright on August 7, 2012 at 1:12pm: Yes

Comment by Chris Connolly on August 7, 2012 at 1:34pm: I agree with you - then why aren't independents doing it? (maybe that's the real question)

Comment by Amber on August 7, 2012 at 3:31pm: Just a couple of reasons I can think of right now....

1. If a person or company has not done it, they will need to learn how to do it.

2. What type of industries/postions do they normally fill? Are these the kind that will utilize contract or contract to hire.

3. Do they have the ability/resources to find and attain candidates who are willing to work on these bases?

4. If a recruiter/agency is not going to their own payroll, etc. will they be able to get a back-office to work with them?

Comment by Bill Schultz on August 7, 2012 at 5:30pm: Some may disagree but I think it's a fairly different mindset to recruit contractors than FTE's. As a FTE recruiter, I spend more time on the character fit than the skill set, knowing that the interviews will vet the skills sufficiently. I think it is vice versa with contractors. Although, I don't say no if someone wants to hire my candidate for contract work. I just charge them 1/12 of the fee monthly.

Comment by Chris Connolly on August 8, 2012 at 8:07am: @Amber - I guess nothing in life is easy - but with the hiring tide still leaning heavily toward contract vs. perm, I think taking the time to find the resources and the services to support the back office are worth the $$, don't you?

@Bill - I could not agree more - it is definitely a different mindset to do contract work, it is much more transactional than normal - but at the same time it's more profitable. Don't forget, you're also providing a more thorough service to your clients. Your idea of the charging 1/12 is interesting. Even going through a company such as mine for your back office services, you would make your perm fee back in 6 months (not 12).

Comment by Jami willson on August 8, 2012 at 8:20am: I'm also agree with your point

Comment by Chris Connolly on August 8, 2012 at 10:27am: Good point Sean - There are plenty of companies that provide all the back office services to support contract recruiting - mine provides front office and back office tools and services as an example.

Comment by Jerry Albright on August 8, 2012 at 10:48am: While a back office approach might be a quick measure in the "oh wow - I just placed a contractor!" situation - as a business approach (if you're going after contracting) I'd recommened calling ADP and then transfering some money into a payroll account. It's really quite simple.

Back office services really cut into your profit margin.

Comment by Chris Connolly on August 8, 2012 at 10:54am: Interesting approach Jerry - I guess if you have the money to float the contractor salary.

Comment by Jerry Albright on August 8, 2012 at 10:58am: The average "float" for a contractor is around 10K. if you can pull that off yourself you'll save a ton of money. Far better/cheaper sources of money than a payroll funding company. Granted - it's a an easier route - but the cost (I've been through that) ends up being quite shocking.

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