Indecisive Client? Pitch a Temp-to-Perm Deal

Oct 8, 2015
This article is part of a series called How-Tos.

July 2015 time to fill DHIIt may be hard to believe, but it is already time to start planning for the end of the year. If you are like most recruiters, you want to close as many placements as possible before the ball drops on 2015.

This may be easier said than done. According to the monthly Hiring Indicators report from Dice Holdings, clients are breaking records when it comes to dragging their feet on hiring decisions. Positions are staying open an average of 29 days, the longest period since tracking of that statistic began in 2001. At the beginning of the recovery in July 2009, the average was 15.3 days.

Fortunately, there are some ways to gently nudge your clients into making hiring decisions. Sometimes it can be as simple as advocating strongly for a candidate you believe in. Or maybe you can just remind the client that the best talent could fall off if the process takes too long. Other times you need a little extra help. That’s where contract-to-direct hire arrangements come in.

In a contract-to-direct hire arrangement, companies utilize a candidate on a contract basis for a period of time and later convert them to a direct hire. This helps address a number of issues that may hold up hiring, particularly this time of year:

Hiring Freezes And Budget Constraints

Like you, companies are focusing on their bottom lines at this time of year. If they don’t like what they see, they may scale back their hiring plans or freeze hiring altogether, putting any open job orders you may have with them in jeopardy. But don’t give up on your job orders. While your clients may not be able to hire direct during this time, they may be able to bring in contractors. Contractors typically come from a different budget than direct hires. Therefore, companies can often utilize them even during a hiring freeze. When the budget loosens up or they start a new fiscal year, they can then convert their contractors to direct hire.

Economic Uncertainty

Even if a company is happy with their financial situation, they may be keeping a cautious eye on the economy. There are a number of factors contributing to their uncertainty. For starters, the political unrest in Congress promises to get even more intense with a new House Speaker and a rebellious group of Representatives. Then there are the ever-increasing employment regulations and the impact of the Federal Reserve decision on interest rates, as well as the latest employment reports. These factors are causing some companies to hesitate about permanently adding to their overhead. Contract-to-direct offers a risk-free way for them to bring in help. If the economy goes south, they can simply end the contracts. If they instead start to feel more secure about the economy, they can extend direct hire offers to their contractors.

The Perfect Candidate Syndrome

Companies that are hiring seem to be holding out for the “perfect” candidate. As a result, great candidates are getting passed up because they don’t appear to have 100% of what the company is looking for. This can be extremely frustrating for you as a recruiter when you know that you have presented a star candidate who would excel in the position. With the contract-to-direct option, you can convince your client to try the candidate on a contract basis. This allows them to evaluate the candidate on the job and gain confidence that he or she is the perfect candidate. If the candidate does prove to be a great fit, the client can then convert them to a direct hire. If not, the company can try someone else. A number of companies are using this option to not only ensure that candidates have the right skills but also to evaluate how they fit in with the organization’s corporate culture.

Besides helping you close placements that might have otherwise fallen off, contract-to-direct also gives you the opportunity to make more money. You are paid for every hour the candidate works during the contract period and even more if they work overtime. Additionally, you can earn a conversion fee if/when the contractor is converted to a direct hire.

Ending 2015 on a high note can be as easy as offering your clients an alternative way to meet their staffing needs. By doing this, you not only increase your ability to close difficult placement, you also strengthen your relationship with your client, ensuring many successful years to come.

This article is part of a series called How-Tos.
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