Making the wrong hiring choice can cost you a lot of money. Forty-one percent of companies that have made a bad hire report that their mistake cost them a minimum of $25,000. It goes without saying that the higher up the ladder the bad hire, the more expensive the mistake. And if a string of bad hires is made, the costs can be astronomical. If you want to maintain a healthy bottom line, it is critical to find your match, rather than settling for a less-than-qualified employee just to fill a vacancy. An effective way to do that is through contract-to-hire positions.
What Is Contract-To-Hire?
A contract position has a distinct endpoint of usually a few weeks or a few months. In a contract-to-hire position, the employer offers a contract with an endpoint, but acknowledges that there is the possibility of hiring that person on full-time at the end of the contract term. There are no guarantees in a contract-to-hire position, but there are some important benefits to utilizing this strategy.
A Better Way to Evaluate Cultural Fit
It’s easy to evaluate candidates for their hard skills these days, but cultural fit is equally as important as skills aptitude. However, it is very difficult to hire for cultural alignment. Even if you conduct extensive behavioral interviews, there is no way to predict just how a person will fit into the existing team or whether they will thrive in the organizational culture.
Contract-to-hire lets both the employer and the potential employee evaluate total fit. If the contract period is 60-90 days, that is plenty of time to determine whether someone feels like they fit in and can do their best work at a company.
When an employee doesn’t work out in a direct hire situation, things get dicey quickly. The employee may quit, or you may have to let the person go, leaving you to start the hiring process all over again. Or they may stay on, doing acceptable work, but ever excelling. In a contract-to-hire, both parties can go their separate ways without any bad blood, if things aren’t going as well as expected.
How To Effectively Utilize Contract-To-Hire
One of the most efficient and cost-effective ways to utilize contract-to-hire is to work with a professional recruiting firm. They can help shorten the time it takes to find contract-to-hire candidates, and they will keep in close contact with you and the employee to monitor how things are going. If the arrangement isn’t working, they can take what they’ve learned and mobilize quickly to find someone more suited for the job. Recruiting firms also handle the salary, benefits and other administrative costs of the employee during their contract phase, helping you manage and control costs.