Contract-To-Hire: Everything You Need To Know Before Accepting

Contract-to-hire work is becoming more and more popular amongst employers in the United States. Many employers don’t want to deal with the legality of bringing in new employees, so they turn to staffing agencies. Here are some statistics regarding contract-to-hire work.

Taking a contract-to-hire job may seem like a risk, but there are many benefits as well. Ultimately, it comes down to how it fits into your life at that moment.

• What Is A Contract To Hire Job?
• Will I Get Hired After The Contract?
• Are There Benefits?
• Do I Pay My Own Taxes?
• Leaving A Full-Time Job For A Contract Job
• Pros and Cons

What Is A Contract-To-Hire Job?

A contract-to-hire job is a short term assignment with a company with the potential to go full-time. These assignments can range from 3 months to 6 months to 12 months, depending on the agreement or type of work.

Typically, contract-to-hire jobs are through a staffing agency. That means you are on the staffing agency’s payroll and not the company you’re showing up to work for. If you transition full-time, you will move to the companies payroll.

Will I Get Hired After The Contract?

Yes, but maybe not. It really all depends on the company you are going to work for. A lot of companies use contract-to-hire jobs to really size up a candidate.

It’s less expensive to determine if someone is a good fit for the company with a short-term agreement, then bring them on full-time and realize it’s just not going to work.

It is always good to ask in an interview about how the process of transitioning full-time works. The employer can be honest with you and tell you if you will likely transition full-time or if they have hesitations due to budget limitations.

Sometimes a company doesn’t know quite yet if they have it in the budget to bring on a full-time employee. They turn to contract workers to get the job done but also give themselves time to secure funding.

Are There Benefits?

Contract-to-hire jobs may offer benefits such as healthcare through the staffing agency. You will have to bear the burden of payments, though. It would be best if you asked before accepting a position to know what your coverage options are.

Be prepared to give up things like paid vacation time and 401k contributions. You will need to be responsible for taking portions of your paycheck and putting them into a traditional or Roth IRA account.

These benefits won’t be a part of your initial contract term, but when you transition full time, you should have access to all the benefits.

Do I Pay My Own Taxes?

If you’re employed through a staffing agency, they should provide you with a W-4 to fill out. The staffing agency will submit taxes to the government on your behalf, so you won’t have to worry about owing taxes next tax round.

Again, this is something you should double-check when being hired on. You don’t really want to be responsible for paying thousands to the government at once when you go to file your tax return.

Leaving A Full-Time Job For A Contract-To-Hire Job?

It seems scary, right? You’re leaving your full-time permanent position to take a contract-to-hire job, and you don’t even know if you’ll be able to go full time.

So, should you do it? Well, it depends. It’s annoying, but there’s no straight answer the internet can give you. Here are a few things to consider to help make your decision:

• Is the pay better?
• Is it a career change?
• Are you leaving a toxic workplace?
• Do you need to move?

Higher Pay: If the pay is significantly higher than your permanent job, you might want to consider taking it. You still have a chance to go full-time but can also take the contract to figure out your next position.

Career Change: Taking a contract-to-hire position may be an excellent opportunity to change careers. Other employers might be hesitant to hire someone who doesn’t have all the experience they’re looking for. In a contract to hire position, you have time to learn the new job while showing them you’re a qualified candidate.

Even if you don’t go full-time, you just developed new skills to put on your resume. If a career change is really what you’re looking for, this might be a viable option for making it happen.

Leaving A Toxic Workplace: Consider your mental health. If your work environment is toxic, it’s probably conducive that you go. A contract-to-hire position ensures you have a job while buying you time to figure out your next step.

Moving: Maybe you have to move and can’t find a full-time position right away. A contract-to-hire can give you the flexibility to make your transition to a new city.

Pros and Cons of Contract-To-Hire

You really need to weigh out all of your options here to determine if taking a contract-to-hire position is the right move.

Remember, taking a contract-to-hire job isn’t only about the employer determining if you will be a good fit. It’s also to see if the company is a good fit for you as well. This may be especially important for you if you’re leaving a toxic work environment to seek somewhere better.

Another good thing about contract-to-hire is that you have an opportunity to cultivate new professional relationships. Having good people to use as references for your next job is really important.