The labor market is tight, and as a result of the Great Resignation and Migration, companies are finding it difficult to find and retain good talent. As we are looking to widen our talent pool, it can be useful to hire competent candidates who can be trained on the job.

Temp-to-hire roles can be thought of as short-term solutions that come with an opportunity for permanent employment. It can also be considered an extended interview in which the candidate and the role itself are evaluated for long-term potential.

A temp-to-hire employee is often hired by a staffing agency, and the employee remains on the agency’s payroll until they are hired by the company. With that said, the company may terminate the contract if they are not completely satisfied with the candidate. Companies also have an option to buy out the candidate if they wish to convert them to a full-time employee before the contract ends. Depending on the goals of each party, temp-to-hire roles can be a great option for both companies and candidates.

How Temp-to-Hire Employment Can Benefit Companies

Extended interview. These roles can provide insights into the candidate’s potential, including how they can contribute to the company’s growth and how they fit in with the rest of the team.

Cost savings. Since the time to hire is lower when it comes to this approach, the overall cost is also reduced. The company also saves money that may have otherwise been lost by keeping the position open. It’s not required to offer benefits that traditional, full-time roles entail, so this adds another layer of savings.

Moreover, the company can take a few weeks or months to evaluate a candidate in action, significantly minimizing the cost of a bad hire, which can be up to 30% of the hire’s first year earnings.

Trial run for new roles. If a company is thinking about adding new roles and isn’t sure if it will produce any measurable outcome, temp-to-hire employment can be an effective option. Other employees will also appreciate the extra hands on deck when the work volume is high.

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How Temp-to-Hire Employment Can Benefit Candidates

These kinds of roles can give candidates an opportunity to see if a position is right for them while also getting paid. It can be apt for people who are looking to learn new skills or experimenting with new career options.

During the contract, candidates are able to make new connections and can get to know the team, making it easy for them to transition to permanent employment if it turns out to be the right fit.

Potential Downsides to Consider

All roles require some amount of training, and a temp-to-hire job means that companies need to spend time training a candidate that may or may not end up on the official payroll. The candidate pool may also not be large for this employment type, as people who are looking for a stable position may not consider it.

Implementing the Perfect Temp-to-Hire Strategy

While hiring for temp-to-hire roles, it is crucial to be selective and think about long-term goals instead of simply considering short-term needs. It can be effective to onboard temp-to-hire employees just like you would with regular employees and provide all the necessary tools they’ll need to find success at your company. To test their fit, be sure to present candidates with new challenges and goals to work toward and use every opportunity to train them and assess their potential.

Even if the role is not needed through the year, you may consider giving temporary workers hybrid roles and allowing them to explore different avenues, especially during times when great talent is hard to find.

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