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Contract vs. Direct vs. Contract-to-Direct: What Positions Are Better For Your Company?

As we emerge from the COVID-19 pandemic, many companies are eager to increase staffing. Yet some uncertainty remains, and you may not be ready to hire too many full-time employees yet. Working with a staffing agency gives you three hiring models to choose from: contract, direct, or contract-to-direct. Here’s a look at how each method works, and how you can decide what you need.

Contract

Contract, or temporary, workers are the easiest place to start if you don’t yet have updated staffing projections. They’re also a great choice to meet seasonal or project-based demand. As the name implies, contract workers are only with your company for the length of their contract. You won’t need to onboard them or add them to your payroll system, and you are free to extend the contract if you still need them when it ends.

Direct

In some ways, direct hires are like the full-time employees you might find from placing a job ad. But instead of recruiting and vetting them on your own, you can leave those tasks to the staffing agency. The agency will work with you to draft a job description and determine exactly what type of candidate you want, and then do the legwork. You will receive a short list of fully qualified and vetted candidates from which to choose, and the staffing firm can even help you with onboarding if desired.

Contract-to-Direct

Contract-to-direct hires are the best of both worlds. You take on the employee as a contract worker, with the option to hire that person full-time if you so choose. This is a great way to get to know promising candidates, conducting an ongoing working interview while you determine if the person is the right fit. If the candidate doesn’t work out, or if you realize you don’t need a full-time employee after all, you are free to walk away.

Which Should I Choose?

All three types of hiring models have their own benefits and drawbacks. Many companies use a combination of two models, or even all three. For example, you might want to direct hire for a critical role, bring on contract workers to meet a deadline, and use the contract-to-direct model to test out whether a new position is truly needed. Your staffing specialist can help you think through your current staffing and decide what best meets your needs at this time.

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