Benefits of Contracting for Recruiters

Why Is It Beneficial For Recruiters To Make Contract Placements

Employers are utilizing contract staffing to fill jobs previously reserved for traditional direct staffing arrangements. The increased demand and advantages of contract staffing, consequently increases opportunities for recruiters who can locate qualified candidates. Companies are using recruiters who are able to meet all of their staffing needs, both contracting and direct. Following are some benefits of contract staffing.

Advantages of Contract Staffing

1. Increased Income from Hourly Fees

Companies normally pay the placement fee hourly as part of their billing rate. 

2. Increased Income from Conversion Fees

Another way contracting increases your income is through temp to perm conversion fees. Often a company does not want to immediately hire a candidate themselves; they want to bring the candidate in on a contract assignment. The recruiter receives an hourly fee while the candidate works on a contract assignment. Later, if the company decides to offer employment to the candidate, you could receive a conversion fee. 

3. Improved Cash Flow

Another major reason to add contracting is to improve cash flow. Contracting can give you a steady weekly income. The cash flow you will receive from contracting is usually quicker than direct placements. 

4. Sole-Source Supplier

Client companies are looking for a sole-source supplier to fill all of their placement needs, whether it is for a direct or a contract position. Being a sole-source supplier for client companies increases your share of the business. If you are not filling all of a client’s needs, some other recruiting firm could be getting a part of the company’s business.

5. Easier Placements

Contract placements are much simpler because the company is not looking for just the right fit; as they do when hiring a new employee. All the company cares about is whether they can get the job done and not whether the candidate has the right personality to fit into the company culture. Interviews, if there are any, are by phone a majority of the time. Client companies focus on the necessary technical skills.

6. Overcome Client Objections

Ever hear that a company isn’t looking to hire? It’s safe to say that every seasoned recruiter has been there. Headquarters may dictate new hires are not allowed. Yet, managers can still utilize contract staffing to complete necessary tasks because the workers are not new hires.

7. Overcome Budget Restraints Objection

The same holds true for company budget problems. Towards the end of the fiscal year, managers must postpone hiring new employees because budgets are exhausted. Contract staffing allows managers to bring a candidate on board until the new fiscal year. Then during the new fiscal year, they can hire them as a full-time employee. As a recruiter, this gives you an hourly income now and a potential conversion fee down the road.

8. Exit Strategy For Recruiters

An exit strategy plays a key role in determining the strategic direction for you and your company. Someday, you may need or want to sell your recruiting firm. Another benefit of contract staffing is that the consistent income generated from contract staffing makes it more attractive to buyers than a firm only offering direct-hire.

9. Recession-Proof Your Business

Unfortunately, history tells us that we will have another recession sooner or later. While direct-hire only businesses seem to bottom out during a recession, contract assignments offer a lifeline to recruiters. Companies still need to get the work done and contract assignments are a way to maintain the organization’s workforce during a recession.