My Thoughts on Contract To HireOriginally published on 6/30/2015
During my talk at Twin Cities Code Camp on Saturday, as I was describing the differences between 1099 solo contractor, W2 employee and incorporated contracting, someone asked about "contract-to-hire" arrangements.
So, the basic idea is to bring someone in as a contractor for a period of time (often 90 days) and, at the end of that period, if things are working well, the company hires them on as an employee.
This can also be done where the company hires the employee and considers the first 90 days a probationary period, letting them go at the end if things aren't working out.
But, it's clear that companies often feel that they can't actually let people go at that point without problems and so the C2H arrangement is seen quite a bit.
I can see the company's side of this and get why this arrangement is appealing. Sadly, SO much about hiring is entirely about that employer-centric perspective. That's how job ads end up describing nothing but what the company is looking for. That's how we end up with companies wanting to only interview people with existing jobs and then only offering interview slots from 8am-5pm, thus guaranteeing they're only going to hire people willing to lie to their existing employer. But, I digress.
From the other side, these arrangements are pretty much a last resort as far as I'm concerned. Clearly, what the company wants is a full-time "permanent" (don't get me started on the use of THAT word) employee.
So, the ideal candidate SHOULD be someone looking for a long-term employment relationship. Someone who prefers the less subordinate relationship of contracting wouldn't be a good fit. Yet, C2H means that, to get the job, that ideal candidate needs to set everything up, tax-wise, to be a contractor, but only for 3 months and then shut it all down.
Which is probably why, as someone who only works on a contract basis, I get so many inquiries from recruiters about these. Clearly, people who are aiming for full-time W2 employment aren't keen on C2H setups.
But, from a contractor perspective, the problem is the same, just reversed. I'm perfectly OK with the 3 month contract, but there's zero chance I'll accept any employment offer at the end.
When I say that to recruiters, most push for some sort of charade where I interview, get the contract, do the 3 months and, all the while, pretend that I'd take an offer if one comes. Then, when that day comes, turn it down. After all, that way, they get paid.
When I tell them that, if asked (and they ALL ask, even in the interview, about whether I'd be open to full-time employment at the end), I'll answer honestly, which is to say, "no", they all decide not to submit me.
Clearly, there's some hope to either take contractors and somehow convince them to become employees or take potentially good employees, turn them into contractors temporarily, and then convert them back.
Whether you like working as an employee or as a contractor, C2H isn't appealing. It's a 100% company-focused approach. And, I recommend anyone looking for work to only consider them under 2 circumstances: for a company you REALLY want to work for and as a last resort.