Organizations heavily depend on skilled IT professionals to lead digital transformation in the fast-paced tech world. However, finding the right IT talent can be a challenging task, especially with the risk of poor hires and high turnover rates. To address these challenges, many companies are choosing contract-to-hire staffing options to not only find the right fit for their teams, but also minimize the risks associated with hiring.
Understanding Contract-to-hire Staffing
Contract-to-hire staffing allows companies to hire IT professionals temporarily, with the option to make them permanent employees later. This option helps businesses assess candidates’ abilities, work habits, and fit within the company culture before committing long term. With the high demand for IT talent and an average tenure of less than two years, this staffing solution has become very popular.
Why Companies Choose Contract-to-hire
Minimized Risk of Poor Hires: A Harvard Business Review study found that 80% of employee turnover is due to bad hiring decisions. By implementing a contract-to-hire approach, organizations can assess candidates’ performance in practical settings, thereby significantly diminishing the risk associated with hiring unsuitable employees.
Lower Turnover Rates: Employee turnover is about 18% annually, with 60% to 70% being voluntary. According to the Work Institute, replacing an employee can cost up to 33% of their annual salary. Contract-to-hire options help ensure new hires fit well, leading to higher job satisfaction and lower turnover rates.
Flexibility in Staffing: The technology sector frequently experiences changes and varying project requirements. Contract-to-hire staffing allows companies to adjust their workforce according to project demands. This flexibility is essential for maintaining operational efficiency and adhering to deadlines.
Effectiveness of Contract-to-hire
Retention Rates: Data from the Society for Human Resource Management (SHRM) reveals that 74% of employers using contract-to-hire models report reduced turnover rates within the first year of employment. This statistic highlights the significance of the evaluation period in determining a suitable fit.
Time to Hire: Considering the average hiring time for IT positions is approximately 60 days, contract-to-hire options enable companies to promptly fill critical positions without compromising on quality.
Quality of Hire: Contract-to-hire staffing leads to a 15% increase in employee performance compared to direct hires, according to the National Bureau of Economic Research. This is due to the thorough vetting during the contract period.
In a competitive job market where IT talent is in high demand, companies should implement staffing strategies that reduce risks and increase efficiency. This approach allows companies to access a wider talent pool, ensuring they find candidates with the appropriate skills and experience, and providing them with the flexibility to minimize the impact on their teams and resources.
As an IT solutions provider, Connection assists companies in hiring IT talent for contract, contract-to-hire, and full-time positions. We offer a 90-working day contract-to-hire program with no conversion fee, providing organizations a period of 90 working days to evaluate prospective employees before making a permanent hiring decision. Contact us today to learn more.
Patrick Dja Konan
Patrick Dja Konan is a Lifecycle Staffing Business Development Manager at Connection. Patrick joined Connection in 2019 as a staffing subject matter expert (SME) after helping numerous companies hire IT talent as both Technical Recruiter and Account Executive. His enthusiasm for technology, along with his profound understanding of today’s IT job market, enables Patrick to work as a strategic hiring partner to companies across the United States and provide them with tailored recruiting solutions to fill critical IT positions. Outside of work, he enjoys spending time with his wife and children.
