When the economy is tight and companies are leery to commit to hiring new permanent employees, a contract-to-hire (C2H) arrangement is an excellent option. This type of arrangement benefits candidates during a recovery cycle and even during good times.
If you are an integration professional, what factors should you consider before deciding if a C2H arrangement is right for you?
What Is Contract-to-Hire?
Contract-to-hire is a specific means to a specific end. Contract-to-hire agreements outline the length of time a contractor will work for a specific employer. At the end of that set period, the employer will decide if the contractor will be hired as a permanent employee or dismissed.
How a C2H Arrangement Can Benefit Employers
Contract-to-hire relationships work well by allowing both contractor and employer to benefit from a trial period prior to a full-time hire. The contract evaluation period often calms uneasiness and allows for faster initial on-boarding, preventing important company initiatives from falling behind while the company waits to find the “perfect” candidate.
When an integration contract-to-hire arrangement breaks down, it is usually due to a lack of leg work to ensure that expectations are set, checked, and properly managed on each side. Open communication most always prevents or solves any issues. However, both sides must be willing to ask the right (tough) questions and evaluate what the other party hopes to achieve from the arrangement. Most often it’s the unanswered question that leads to failure. However, most true contract-to-hire arrangements will result in success for everyone.
Pros and Cons of C2H Arrangements for Contractors
Just as there are potential benefits and drawbacks of contract-to-hire arrangements for employers, there are pros and cons for contractors.
Pros for a contractor:
- The ability to try out a company before you commit fully. With a C2H agreement, you get to experience the culture, work environment, and job responsibilities with no long-term commitment.
- The opportunity to demonstrate your value. If you are a real pro in what you do, working in a C2H role gives you leverage to negotiate salary and benefits when the time comes because you have proven your value to the position during the agreement period.
Cons for a contractor:
- No guarantee of future employment. If the employer decides at the end of the agreement period not to extend an offer of permanent employment, you will need to start over on the job search front.
- No benefits and less financial security. A C2H employer does not pay benefits. Further, if the contract expires and the employer does not offer a permanent position to the contractor, no severance will be paid to the contractor.
Should You Accept a Contract-to-Hire Agreement?
If you are a contractor contemplating accepting a C2H agreement, here are some factors to consider:
- Are you a fit for the role based on skills, experience, and career goals? Your skillset, background, and career goals must align with the role for the best outcome. This alignment ensures that you are placed into a satisfying and mutually beneficial role, instead of just accepting the offer of income until something better comes along.
- Why does the company prefer a contract-to-hire arrangement? If the company has a history of hiring on a contract-to-hire basis, then things generally work out well. If the employer has never hired in this fashion, clear expectations of performance and goals should be set and reviewed regularly.
- Are there limitations or additional expectations to be aware of until you are hired full-time? Ask questions about things like system access, overtime, and travel. Asking these questions will help you avoid overlooking a critical requirement for success.
- Is it safe to leave an existing job for a contract-to-hire position? Let’s assume that all your questions are answered and the company is stable, with a history of successfully placed contract-to-hire employees. Let’s also assume that you have done your legwork and the prospective employer has provided a solid job description, a date you can expect to convert from contract to full-time status, and a plausible salary range. If you know and are satisfied with the answers to those questions, the opportunity can be a good move if the job aligns with your goals and is a match for your skills. In a stable company, a well-planned and executed contract-to-hire scenario poses no more risk to a solid performer than a permanent hire.
Are you an employer or an EDI professional looking to enter into a contract-to-hire position or find another employment option? REMEDI can help. Contact us today to discuss your unique situation.