Which Offers More Job Security: Direct Hire or Contract Staffing?

In the not so distant past, the title question would have been a no-brainer.  Direct hire, right? After all, workers in contract staffing were often referred to as temps.  Certainly a work arrangement that is temporary by it's very nature could not be more secure than traditional employment.

But we are now living in a post-recession world, a world where there is no such thing as a permanent job. It is rare today for workers to spend their entire careers with a single employer. For this reason, we purposely do not use the word "permanent" to refer to direct hire positions in our Recruiter's Contract Staffing Blog, and many recruiters follow the same rule. Jobs have and can end with little or no notice, leaving laid off workers shellshocked, scrambling to update their resumes and start their unexpected job search. 

Many people think taking a contract position poses a bigger risk.  How does someone know that they will be able to find work when an assignment is over? Well, as they say, knowledge is power.  Knowing that an assignment will end allows workers to prepare for it, unlike layoffs in traditional employment.  Contractors keep their resumes up-to-date and line up future assignments. They know that an employer will never be as vested in their future employment as they are, so they learn to depend on themselves secure ongoing work.

Or they depend on a recruiter like you to help them.  Contract assignments usually start with a tentative end date. When that date nears, you have an excuse to touch base with your client. If they confirm the assignment will end, you can start working on securing your candidate's next contract position. (By the way, this is also a good way to strengthen client relationships and get more job orders). In the absence of a tentative end date, clients may give you a heads up when an assignment is about to end with enough advance notice to allow you to line up another "gig" for the contractor before the current assignment officially ends. The beauty of this for recruiters is that, rather than placing a candidate only once and earning one placement fee, you can earn that fee over and over by placing the same great candidate.

Contracts are also often extended, lasting much longer than expected. They can even turn into direct hire positions, which is great for you because you can earn a conversion fee over and above what you earn while the contractor is working.

Job security is just one of many reasons candidates are choosing contract staffing as a lifestyle:

  • Flexibility - The project-based nature of contract positions allows better work-life balance because it's less likely that the contractor will have to keep a 9-to-5 schedule.
  • Earning potential - Contractors are paid for every hour worked, including overtime hours.
  • Enhance resume - Contractors can make themselves more marketable by picking up new knowledge and skills with each assignment.
  • Variety - Working on contract allows workers to try different types of work, projects, companies, and even geographic locations.

If you do not already offer contract staffing to meet your clients needs, you may want to start. Doing so is not only vital to keep clients happy but also to attract quality candidates who prefer contract assignments.  

Debbie Fledderjohann is the President of Top Echelon Contracting, Inc.

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