Why Hiring Managers Increasingly Prefer Interim Hiring

Interim hiring is on the rise.  According to Chris Martin, senior vice president of Randstad U.S., “In 2012 less than 11 percent of our job openings started as contract-to-hire—in which the company states at the outset that it’s looking for someone to eventually hire permanently. This year, we’re at 19 percent.”

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Dice.com, which predominantly features tech jobs, reports similar finding – 48 percent of jobs posted at Dice are contract jobs, of which 27 percent are contract-to-hire positions.  This amounts to contract-to-hire positions totaling about 13 percent of all job postings.

Granted, there are some positions that have shown more propensity for interim hiring, like technology.  At the same time, interim hiring is becoming mainstream to other areas as well, such as finance, human resources, and marketing.  Why the increase?

Before we look into the specific reasons, we have to look into the changing nature of employment itself to get overall context. The gig economy is on the rise, as the booming popularity of Uber and Airbnb shows.  According to a study by Intuit, 40 percent of jobs in the US will be temporary by 2020.  Movement from Permanent to Interim is part of the general shift to the gig economy, and savvy companies will want to be ahead of this curve rather than scrambling to play catch-up down the road.

From a hiring manager’s perspective, here are some of the many reasons they prefer interim hiring:

  • Interviews alone are not enough to really assess candidate’s hard skills (like technical), soft skills (communication), as well as their cultural fit to the organization. A few months on a contract position will allow hiring managers and the rest of the company to assess the candidate’s overall skills and fit before committing to full-time employment;
  • Many times, getting permanent headcount approval is difficult. Interim hiring enables hiring managers to bring aboard a candidate before waiting for that formal approval to come through, to help bring pending projects to closure (see this blog for more information on the enormous cost of unfilled positions). This is especially true when an excellent candidate becomes available in the market while formal headcount has not yet been approved;
  • For many startups, finance is tight and may be available only for few months into the foreseeable future. Committing to the candidate for a full-time position is a bit misleading in such situations. Interim hiring enables hiring managers to bring the candidate onboard while offering full disclosure about the situation. If the financing coming through and the candidate are a great fit, convert the position to full-time;
  • In some situations, because of the lack of availability of skilled candidates, companies hire candidates with the educational qualifications and raw skills with intention to teach the candidate specific skills during a probation period. Interim hiring is excellent in such situations to ensure the candidate has the right aptitude and desire to learn. Decisions to make them permanent can be made with full confidence after the contract period.

It is also useful to look at the interim hiring concept from the candidate’s point of view, who may want to try interim term because of the following reasons:

  • A candidate wants to test out if a company is the right one for him or her – for the job fit as well as cultural fit;
  • It’s just a great way to expand one’s professional network. Even if the interim job does not convert to permanent, the candidate can connect with more people in the industry during the contract period—which might help him or her to land the dream job in a different department or company; and
  • With many staffing companies providing medical insurance and other benefits on a W2 arrangement, interim jobs are becoming more family-friendly by the day.

Considering the above benefits to employees as well as organizations, it’s no surprise that interim hiring is becoming a growing category in the job market.

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