Why ‘Contract-To-Hire’ Makes The Most Sense In The Tech Space

February 9, 2021

It’s no surprise that contract and contract to hire roles are a fairly new trend for many startups and large organizations in tech. Some companies prefer going the contract or contract to hire route instead of filling traditional full-time, permanent roles. 

Contract to hire saves time, money, among other important perks like profitability. 

It is estimated that in the next 10 years, contractors and freelancers will comprise nearly half the workforce, according to 4 Corner Resources. 

What is a Contract to Hire position?

A contract-to-hire position refers to a short-term or temporary position that an IT staffing agency like Focus GTS can help fill. The position could also potentially lead to a full-time hire for a particular company, assuming all goes well. 

Part of the reason why some companies choose to hire contractors is that it is highly profitable and helps reduce internal costs and liability, according to CNBC. Additionally, going the contract or contract to hire route seems more logical when a company needs skilled talent for a limited or temporary period for certain projects. 

During the pandemic, many companies have reconsidered letting employees and contractors work remotely for the foreseeable future. The culture of full-time permanent and contract to hire has also shifted and been reimagined. 

In a gig economy, it is easier for companies to seek out contractors instead of committing to a full-time hire, only to realize that the employee was not a good fit. There is less of a risk when hiring contractors who can meet certain high-demand expectations in the tech space. Working with a variety of contractors can help meet company goals faster and more efficiently. 

According to a study cited by CNBC, “workers with jobs in higher wages are more likely to have their services contracted out than jobs associated with lower wages.” 

It is also quite competitive in this economy, which results in an overflow of candidates that might not have the niche skill sets your company is looking for. 

If your company is looking for a qualified staffing agency that specializes in filling niche tech roles, contact Focus GTS. We’re happy to help. 

We’ve compiled a few reasons why a contract to hire makes sense for most tech companies.

There is Not Enough Supply for Quality Tech Developers 

Finding top-notch tech developers or candidates in specialty positions can be complicated to navigate. In essence, the demand for tech developers is higher than the supply, which represents a challenge to small startups. 

For larger and more reputable companies, it’s a different story. Many top companies like Facebook or Amazon are quick to offer highly competitive salaries and grab in-demand and skilled tech candidates right away. 

They have the robust network and budget to provide better benefits and perks, which might turn an in-demand candidate away from working with a small startup. However, this hiring cycle leaves smaller startups and medium-sized companies who are looking for quality talent in the dark. 

In a Gig Economy, Contract Candidates Value Flexibility and Creative Freedom 

The traditional concept of working at the same company for many years has changed. Being a 9-5 permanent employee with health benefits, a 401(k) plan, and other benefits have dramatically changed over the decades.

More candidates are increasingly open to accepting contract jobs for better work and life balance. Sometimes, they’ve found that working as a contractor as opposed to a full-time employee has allowed them the freedom to make more money. 

Additionally, according to a study by Gallup, millennials are more likely to switch jobs. They are also likely to be open to new job opportunities, particularly contract, and contract to hire. 

“Millennials have a reputation for job-hopping. Unattached to organizations and institutions, people from this generation — born between 1980 and 1996 — are said to move freely from company to company, more so than any other generation,” writes Gallup. 

As a hiring manager, it is crucial to consider this statistic. It is important to find a specialized tech staffing agency that can represent your company’s interests as you solidify a contract-to-hire role.

Contract workers don’t have the perks of getting company benefits. They have other freedoms like the flexibility to set their hours and work remotely. Tech companies benefit from contractors, especially if there’s a temporary demand or need to fill an open contract role for specialized niche skills. Working with a contractor provides flexibility and cuts back on internal costs. 

If your company wants to hire a contractor but doesn’t know where to start, we’re here to help. As a specialty niche recruiting firm, Focus GTS matches quality talent with small to large-based tech companies.

Many Tech Professionals Prefer ‘Contract To Hire’ and Use it as Leverage 

Some tech professionals may prefer going the contract or contract to hire route for the many reasons we listed above. However, some tech professionals also use the contract-to-hire method to get their foot into the door and test the waters. 

As contractors, tech professionals can jump ship or leave a contract if the job is not challenging or fulfilling. They are not as tied to a position because of the flexibility of contract roles. As contractors, they enjoy the advantage of working on a variety of projects. Before committing to a full-time job, contractors like to communicate with different personalities and teams. 

For many tech companies, hiring contractors may seem like the best option to meet their organizational needs and offload some of the tasks to someone flexible enough to work on a contract basis. 

Many tech companies have shifted their hiring practices by hiring in-demand contracts and contract to hire roles in the AWS, data science, AEM, and other technical or specialized emerging technology fields. It’s a trend that will continue to dominate the industry for years to come. According to Forbes, many large companies, like Google and Apple, hire more contractors than employees. 

“The reality is the company is merely following a growing trend of tech employers opting to hire contractors over full-time employees,” Forbes writes. 

Rethinking Contract & Contract-to-Hire and Permanent Role 

According to a study conducted by Freelancing in America, approximately 57 million Americans have freelanced. The number, according to Finances Online, will exceed 90.1 million by 2028. 

In a gig economy, many organizations have shifted or changed their hiring strategies. Some of their policies are now more appealing and inclusive to contract-to-hire roles. Others have altogether slashed 401(k) contributions for permanent employees due to the pandemic.

The pandemic has inspired companies to be more creative and rethink the definition of a contract to hire role. Some companies are making adjustments to incentivize and keep high-quality contract-to-hire professionals on board. 

Align yourself with an expert. Contact one of our specialized recruiters to learn more about how your company can benefit you. We are a niche staffing agency that specializes in contract-to-hire roles.