When bringing in new employees, companies have to make a decision between healthcare direct hire or healthcare contract-to-hire. While there is a debate regarding which hiring method is better, both staffing types have their merits and drawbacks.
In this blog, we’ll take a deep dive into the advantages and disadvantages of contract-to-hire. If you’re looking to make a new hire, it’s important to understand whether or not contract-to-hire would be the right choice for your health care company.
In a contract-to-hire scenario, new hires are placed at a company as a contractor making an hourly rate. After a specific time period, typically 3-6 months, the contractor’s employment is evaluated and and they are either made a full-time employee or let go to find another opportunity. Although, it should be noted that with a contract-to-hire position, candidates are placed with the intention of going from being contract employees to full-time employees. Neither the recruiting agency or you as an employer are under any obligation to convert the employee to permanent status.
Advantages of Contract-to-Hire
There are several benefits when it comes to using contractors instead of employees, including both cost and flexibility.
You will most likely save money with a contractor. While most employers pay contractors more per hour than they would pay full-time employees, it actually ends up costing more to hire someone full-time. This is because when you hire a full-time employee, you have to pay a number of additional expenses that you do not have to pay a contractor, including benefits, software licenses and IT equipment and office space. Moreover, you will also be required to make payments on behalf of your employees when it comes to social security, medicare taxes, state unemployment compensation insurance and workers’ compensation insurance. When you combine these expenses, they can increase your payroll costs by 15%-40%.
In a recent roundtable discussion on recruiting for startups, many participants said they wouldn’t hire someone without trying them out first. Hiring someone who isn’t a good fit can damage the culture of your company and set you back many months. While the panel agreed employee referrals help, they can lead to a workforce with a lack of diversity. One company decided to “try out” employees by first having them perform mini projects on a contract basis and still has yet to fire a single person hired through that method. If your company is having trouble finding the right cultural fit or is hesitant to pull the trigger on a direct hire, you may want to give employees a trial run with a contract-to-hire arrangement.
Disadvantages of Contract-to-Hire
It’s easy enough to read the previous section and start thinking you’ll never need to hire a full-time employee again, but there are also some significant drawbacks to using contract employees.
Hiring a contractor can have a negative impact on the morale of your staff. Although they may be thankful for the additional manpower, they may also begin questioning the security of their own jobs. As you conduct your search, it’s likely that you will find fewer candidates looking for contract-to-hire positions compared to full-time positions. This is a good reason to work with a healthcare staffing firm like Healthcare Recruiters International so you can get connected with qualified candidates interested in contract-to-hire positions that fit in with your company in terms of skills and culture.
You will have a much tougher time attracting the sought after “passive” candidate with a contract-to-hire position. The reason for this is that not many employed people are willing to risk leaving a permanent role for something that isn’t guaranteed. This reduces the search to those who are either unemployed or have been consulting but would consider a permanent role. In most situations, many more candidates are in play when it’s a direct hire scenario.
From the candidate’s perspective, it can be risky to take a contract-to-hire position, so it may take some serious convincing to bring someone on board. Many candidates in contract-to-hire scenarios who are promised permanent roles after their evaluation period end up seeing their opportunities vanish into thin air because budgets dry up, their positions are absorbed or the employer decides they aren’t a good fit. This can be devastating for a candidate and is sure to drive them away from contract-to-hire opportunities in the future.
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Partner With Healthcare Recruiters International for your Contract-to-Hire Needs
With the limited pool of contract-to-hire candidates available, it can be greatly beneficial to partner with a healthcare recruiting firm. A healthcare recruiting firm can help parse through the candidate pool to find someone who is both qualified and interested in pursuing a contract-to-hire position. We’ll work with your business to understand its nuances, culture and needs to help you build a connection with the talent you need.
We provide much more than just a recruiting service, instead, we are a consultative business partner that can help your company achieve greater success through hiring people that will make a positive impact. We’ve made over 20,000 placements for leading companies ranging from startup to Fortune 500. Our recruiting team has worked in the industry, knows it inside and out and utilized first-hand knowledge to identify strong candidates and create the relationships that lead to great new hires. If you’re looking for a new permanent hire or contract-to-hire employee, contact us today to get started. Whether you need a need Allied Health, Hospital, Healthcare IT, or Medical Device hire, Healthcare Recruiters can help you find the talent your business needs to be successful.