Contract staffing is not just a singular service offering that you can add to your business model. It provides a variety of ways to help solve your clients’ unique staffing issues. In fact, there are six commonly recognized types of contract placements that you can offer to your clients:
1. Traditional contract staffing
- Recruiter gets contract job order and locates candidates.
- Client selects candidate.
- Recruiter negotiates rates with client and candidate.
- Contractor becomes employee of a staffing firm/contract staffing back-office.
2. Temp-to-direct hire conversions
- Contractor is placed on contract with the intention of eventually being converted to a direct hire.
- Allows client to “try-before-they-buy” to ensure the candidate is a fit before making the direct hire commitment.
- Recruiter receives hourly profit for every hour the contractor works AND a conversion fee when they go direct.
- Contract period typically lasts 6-12 months.
3. Payrolling for Direct Sourcing
- Client has a short-term need (3-12 months).
- They have already located a contract candidate.
- Client outsources employer responsibility (payroll, taxes, Workers’ Comp, employee benefits, etc.) to a staffing firm/contract staffing back-office.
- Recruiter earns less hourly income, but because there is no recruiting involved, there is less work!
4. 1099 independent contractor to W-2 employee conversions
- The IRS is cracking down on companies that incorrectly classify W-2 employees as 1099 independent contractors (ICs).
- Recruiters should educate clients on the difference between ICs and employees.
- If the client has misclassified ICs, the recruiter can convert them to a W-2 employee and outsource the employment of the employee to a staffing firm/contract staffing back-office.
- Recruiter earns less hourly income, but because there is no recruiting involved, there is less work!
5. Retiree re-staffing
- Companies retain or gain the skills and experience of a retired worker by bringing them on as a consultant on a contract basis.
- The retiree becomes an employee of a staffing firm/contract staffing back-office.
- Retirees enjoy the flexibility, supplemental income, and opportunity to remain active in the workforce.
6. Internships/co-ops
- For college students and graduates trying to gain real-world experience.
- Clients avoid payroll and human resources issues associated with short periods of employment by making the interns contractors who are employees of a staffing firm/contract staffing back-office.
- A viable alternative to unpaid internships.
If you want to increase your volume of active contract placements, give FoxHire’s employer of record services a try. We handle the administrative details of contract workers so that you can focus on recruiting.
