Construction Hiring: Building a Stronger Construction Workforce

Construction Hiring: Building a Stronger Construction Workforce

Job recovery since the 2020 pandemic has been on a mostly steady incline, with the construction industry serving as a strong contributor to the labor market. The Bureau of Labor Statistics projects an average of 151,400 construction jobs will be added to the economy each year over he next decade. However, even as those jobs are created, construction hiring can still be a challenge as management companies and contractors try fill the roles with skilled and willing workers. 

In March 2024, NPR reported that the industry added 39,000 jobs even in the face of high interest rates, and found nearly 48 percent of builders surveyed planned to add jobs over the following six months. Even as the industry remains plagued by supply chain concerns, high material costs, and interest rates that stall residential building demand, significant opportunity remains for construction hiring in public works, manufacturing, and other commercial segments.

Wherever an industry is growing, it faces roadblocks to hiring skilled labor to fill the demand. Ryan Odendahl, the CEO of a civil and industrial construction firm, told NPR:

Young people are starting to see the opportunity, both from an earnings potential and a growth potential that the construction industry offers. We need to do a better job as an industry of telling some of the great things that are going on in construction. We are competing with all of the other industries in the economy for people.”

4 Tips to Improve Construction Hiring Efforts

Construction Worker on Duty. Caucasian Contractor and the Wooden House Frame. Industrial Theme.

While those in the industry know all too well the challenges of getting out that message, there are some concrete ways to optimize the construction hiring and recruiting process to help build a stronger workforce.

Define Your Company Culture

The idea of company culture may sound like a buzzword more suited to the tech industry. But research performed by MIT Sloan after the pandemic workforce upheaval showed that attrition is “affecting blue-collar and white-collar sectors with equal force.” One of the most commonly cited reasons for leaving was toxic company culture; “by far the strongest predictor of industry-adjusted attrition and is 10 times more important than compensation in predicting turnover.” 

Both a huge construction firm hired to build an airport and the “mom and pop” remodeling company can find value in looking for ways to meet workers’ needs. Some of these core values may include:

  • Equitable treatment without discrimination
  • Fair wages, including overtime pay
  • Paid leave
  • Flexible schedules
  • Benefits like health insurance or retirement contributions
  • Ethical management practices
  • Fair and respectful supervisors and colleagues
  • No fear of retribution
  • Proper onboarding and training
  • Clear work expectations, including required hours and allowed breaks
  • Opportunities for advancement, including raises, bonuses, or promotions

Taking time to define and communicate the company’s core values can go a long way in making new and prospective workers feel like the company is trustworthy and a supportive place to work.

Identify Ways to Speed Up the Construction Hiring Process

Construction projects run on tight schedules, and delays and pushbacks can cost the company. Weather, unexpected additional work, and budget overruns are constants in construction, so maintaining a consistent labor force is key. Once you’ve set yourself apart with positive company culture, spend only the time necessary in the hiring process.

There are many tools for hiring efficiency, but one of the best is an applicant tracking system like ApplicantStack. Especially if you post jobs on popular sites, the volume of applicants may be overwhelming and lead to delays. ApplicantStack can quickly and easily sort by speciality, experience, and many other categories to help you sift through and find the worker you need at the moment.

Once you’ve flagged those you’d like to interview, quickly contact by email or text from within ApplicantStack to keep track of communication and never let anyone slip through the cracks. Follow up as soon as possible with interview dates and times, and keep communication timely throughout the process to ensure you don’t get ghosted by the applicant.

Adjust Your Requirements

Hard skills like framing, finish carpentry, or heavy machine operation are vital for certain types of construction jobs. Safety and efficiency demand that workers in some roles have completed prior training and demonstrate competency. But consider that for other roles, your recruiting could weigh soft skills and trainability as a useful way to quickly fill out your workforce. Demonstrable soft skills that are valuable on a construction site include:

  • Good communication
  • Conflict resolution
  • Learn new skills quickly
  • Adaptability to new situations
  • Positive attitude
  • Respectful
  • Helpful

Candidates who are looking for a career change or are new to the job market may possess a host of soft skills that, combined with some training, can produce a skilled and dedicated member of your team.

Focus on Onboarding

On a construction site, proper training is key for worker security and safety. Even employees with experience in the industry will need to learn how work is done with your company. Identify employees with good leadership skills, work ethic, and proper training to onboard new employees for a set amount of time. For those with training, that may look like observing tasks and providing feedback or encouragement. For people new to the industry, that may look like demonstrating skills and careful supervision. And always make sure new workers are aware of all federal and state safety requirements.

Proper onboarding can help workers feel like they didn’t get thrown in the deep end and left to flounder. It can be a challenge to find the right trainers and the time, but workers who feel supported from their first days are more likely to stick around and put their newfound skills to use. A positive onboarding process can play a role in improved employee retention rates, making it a worthwhile investment for any company.

A fast-growing sector like construction can still benefit from taking some time to effectively use recruiting and hiring tools and philosophies. Finding and managing prospective employees with ApplicantStack can help you identify skilled talent and build a strong workforce, boosting your organization’s success.

What is Agile Recruiting, and How Does It Impact Your Hiring Efforts?

What is Agile Recruiting, and How Does It Impact Your Hiring Efforts?

Finding the right person to hire can feel like an uphill climb, especially when you receive a hefty stack of applications for an open role. The recruiting process has changed in the recent past, resulting in need for agility among those who play a role in finding and bringing on top talent. Whether you’re a small business owner, hiring manager or recruiter, it’s helpful to understand what agile recruiting looks like and the impact it can have on your recruiting efforts.

What is Agile Recruiting?

Agile recruiting spins off agile development, offering a unique take on the traditional process of finding and bringing on talent. The goal of implementing agility in your hiring efforts is to adapt to changes in the market and business needs.

When you think about hiring processes of the past, you may recall slow movement, a lack of flexibility and bottlenecks from start to finish. Agile recruiting streamlines the efforts made by all involved, helping hiring managers and company leaders to identify top talent through collaboration.

But in order to implement agile recruiting, your company must be open to communication. An open line of communication is the key to success in improving your hiring efforts. When this component is missing from the process, no one wins.

3 Benefits of Agile Recruiting

It’s no secret that hiring has continued to get more and more challenging since the Great Resignation and economic shifts. More than three-quarters of hiring managers note that attracting qualified candidates is the greatest challenge, while over 40 percent report significant difficulties in filling entry-level roles.

Explore these three benefits of implementing flexible recruiting processes that can help your business overcome these challenges.

Improved collaboration

Streamlining the collaboration between team members can support faster, more effective decision-making. Where standard hiring processes are slow, agile recruiting is quick and efficient. Ongoing check-ins between all involved in the process also fosters unity and identifies potential obstacles before they arise.

Enhanced candidate satisfaction

Today’s candidates need to feel like they’re valued and included. A lack of communication can put a lot of strain on the relationship, potentially leading to applicants looking elsewhere for employment. And a slow-moving hiring process lends itself to top talent being snatched up by other companies that implement agile recruiting practices.

A greater emphasis on open communication and collaboration supports candidates’ needs and keeps everyone in the loop.

Access to ongoing feedback

Ongoing feedback is another key advantage of agile recruiting. Company leaders can avoid wasting resources and time on candidates who aren’t good fits for open roles, offering significant cost savings.

The Impact on Your Hiring Process

If you’re willing to adapt to the changing market and economic conditions, your company can maximize hiring efforts with improved agility. The benefits of agile recruiting extend beyond those mentioned here, with hiring the right person earning a spot at the top of the list. Considering that a bad hire can cost a business close to $15,000, it’s an investment worth making, particularly for a small company that doesn’t have that type of money to waste.

With ApplicantStack, agile recruiting practices are easy to implement. The applicant-tracking system offers a fresh approach to hiring that ensures quick movement and ongoing communication. Text candidates to ensure that everyone is on the same page, and utilize the built-in functionality to manage top candidates and move them through the process quickly and efficiently. When you’re ready to incorporate agile recruiting into your processes, get started with a free trial.

How a Healthcare Talent Pool Can Support Hiring Efforts

How a Healthcare Talent Pool Can Support Hiring Efforts

The healthcare industry continues to experience rapid growth. According to the Bureau of Labor Statistics, the field projects 1.8 million openings per year through 2032, both due to employment growth and the need for replacement. These roles include all levels, from support staff to providers and administrators, emphasizing the importance of a robust hiring strategy for all organizations operating in the healthcare space. Explore the benefits of building a healthcare talent pool and how to simplify the hiring process with the latest technology.

What is a Healthcare Talent Pool?

A healthcare talent pool is a database of qualified candidates, built by an organization in this industry to fill open roles as they become available. In order to build this type of database, a company must maintain the contact information and other details about various individuals who meet the criteria for being hired. Previous applicants, those who engage in related groups online, social media followers, previous employees, and internal prospects may all fit into the talent pool.

Those involved in the recruiting process must take an active role in building a talent pool, as they have access to the information of people who might be considered for future roles. When a position opens within the organization, a hiring manager can review qualified individuals in the pool, rather than opening the job up to a wider audience of potential applicants.

4 Benefits of Building a Healthcare Talent Pool

Review some of the benefits of establishing a healthcare talent pool to support your hiring needs.

Cultivates trust

Building trust with potential new hires is vital in today’s market. Skilled, qualified healthcare professionals can be a bit pickier about where they choose to work, which means you’ll be competing for top talent. But by maintaining transparency with those who are selected to remain in the talent pool, you can establish a trusting relationship that is mutually beneficial.

Simplifies the hiring process

Hiring can be a time-consuming process that requires multiple stakeholders to put in a lot of effort. Between creating and posting a job description, reviewing applications, performing screening tasks, scheduling and conducting interviews, reviewing references, and extending offers, simply bringing on one person can take many hours.

But with a pool of screened and vetted individuals, many of these steps in the process are eliminated. You can reach out to those who are qualified for open roles, providing details about the position and gauging their interest level. A phone interview may be all it takes to determine whether the person is a good fit, or you may prefer an in-person meeting. No matter the situation, you’ll certainly save time and effort.

Provides access to qualified individuals

When you post a job, it’s likely that you’ll get as many as several hundred applications, according to an article on LinkedIn. The average corporate job opening gets approximately 250 applications, which means those involved in hiring are sifting through a lot of potentially unqualified individuals.

By contrast, heading straight to your candidate pool provides quick access to qualified, skilled individuals. You can skip the process of posting a job, focusing on people who have shown interest in working for your organization in the past to save time.

Reduces the time to hire

In healthcare, teams rarely have time to wait for a lengthy time-to-hire process. The quality of care provided within the facility or by support staff depends on having a full team of people, each performing their own duties. Reducing the time spent on the hiring process can protect those who entrust your organization for care and treatment, as well as provide support to the other members of the team.

Incorporate ApplicantStack for Improved Hiring

With ApplicantStack, building a pool of qualified healthcare workers is simple. All data from previous applicants remains in the system, giving you access to their information when you have a potential role that aligns with their skills and experience. With the Candidate Management features, you can also maintain an open line of communication. Text potential new hires, utilize email templates, and review reports to keep everyone on the same page.

Learn more about ApplicantStack and how it can benefit your healthcare organization by giving it a try. It’s free, and there are no strings attached.

Is a Gap a Red Flag on a Candidate’s Resume?

Is a Gap a Red Flag on a Candidate’s Resume?

A resume can only reveal the smallest slice of a job seeker’s life story. After the pandemic’s upheaval on the job market, people’s resumes may look a bit different than in decades past. Employment gaps are becoming a more common occurrence, but they’re not necessarily cause for alarm. Hiring managers who approach a candidate’s employment gap with empathy and curiosity may find that the reason reveals something logical or even beneficial. Read on to help you determine if an employment gap is a red flag in a potential hire.

What Is an Employment or Resume Gap?

An employment gap refers to an extended period of time, perhaps multiple months or years, where the applicant has no recorded work history on their resume.

Traditionally, hiring managers would read a resume and expect to see a continuous employment history with no long gaps between jobs. This has long been viewed as a marker of a dedicated and committed worker who hasn’t taken “breaks” from the workforce. Resume gaps could also be attempting to hide jobs an applicant isn’t proud of.

But the truth is that 68 percent of workers “have experienced a gap in their employment.” Since so many members of the workforce are in this boat, it’s worth looking further into the individual and their experience.

Why Are Employment Gaps Seen as Red Flags?

At first glance, employment gaps may look like the applicant is trying to hide something that would eliminate them from consideration. Conventional recruiting wisdom says someone should never leave a job without another opportunity lined up. Being fired or unexpectedly let go can often lead to an employment gap while the person starts the process of searching, which can easily take months depending on the field. A hiring manager may see being fired as a red flag.

Employment gaps on a resume can also be used to hide a short-lived job that the candidate would prefer not to list. A person’s job history may include a series of short-term jobs that could, to some recruiters, make a candidate look irresponsible or unreliable.

Chances are, jumping to these somewhat outdated conclusions won’t serve your business or the candidate in front of you. In some sectors, company buy-outs can affect a huge percentage of a company’s employees through no fault of their own. Companies go out of business unexpectedly, department managers are fired and their whole staff is let go, and new leadership changes the focus of business so a person’s skills no longer fit. And there are many personal reasons someone may spend time away from the workforce.

Rather than dismissing those resumes right away, it might be worth giving an otherwise interesting candidate the opportunity to explain their experiences in the next phase of the hiring process. 

Common Reasons for Resume Gaps

Workers have a wide variety of reasons for a resume gap. Some common ones may include:

  • Giving birth to a child and/or providing full-time care for children
  • Caring for a sick or aging family member
  • Health concern or long illness
  • Mental health issues
  • Employer went out of business
  • Training for new skills
  • Classes for certification or a degree
  • Exploring new hobbies
  • Freelance work
  • Widespread unemployment in a particular sector, such as food service during the pandemic
  • Travel
  • Relocation

Providing the candidate the opportunity to explain these or any other employment gaps may reveal characteristics that recommend them for hire. Someone who spent time traveling may have saved money for the trip which shows a forward-thinking mindset. A caregiving role could show that person has empathy, multi-tasking, and problem-solving skills. Freelance work can show initiative and time-management skills. Coping with mental health challenges can demonstrate strength and resolve.

How Resume Gaps May Appear on a Resume

Some job candidates might choose to add sections to their resume that describe the reasons for the gaps. A new parent might highlight the time spent on maternity leave with the dates they chose to spend providing full-time child care. Someone who spent some time traveling around in an RV might put those dates with a short description of the places they visited. 

A person who did freelance writing or sold handmade goods could describe those months or years as self-employed or independent. A caregiver for an ill family member could highlight those months or years of unpaid labor as an important period in their personal development. Some candidates may choose to simply describe it as a “career break” with no further details.

A hiring manager can scan resumes or applications for any creative descriptions of employment gaps and approach the candidate with an open mind. To job seekers, Monster Career Expert Vicki Salemi counseled, “Providing hiring managers a reason for the break and what was learned can quell their curiosity and fears about your abilities and commitment.” The candidate doesn’t necessarily owe the hiring managers details about a private experience, particularly if the reason is health-related, but the hiring team can gauge a person’s renewed commitment to a new job with empathetic conversations during an interview.

How to Discuss Employment Gaps

When a candidate advances to the interview stage, you have the opportunity to gain more insight into an employment gap. Though some candidates may be reticent to discuss details of private matters, you can steer the conversation to lessons learned or future employment goals. Consider some of the following questions to address gaps:

  • What made you decide to pursue full-time employment again?
  • How did you stay connected to the industry during time away?
  • Can you describe your freelance/consulting/independent work?
  • What lessons did you learn during this experience?
  • What soft skills did you work on during your time away?
  • How have you handled re-certification [if applicable]?

The job market changes with the times and requires flexible hiring managers who can see beyond old platitudes. For small businesses, the demands of hiring can be overwhelming. Considering employees with a resume gap requires thoughtful attention. ApplicantStack can help you organize and sort every resume so no qualified job seeker gets left behind.

Unlock Success With Expert Candidate Screening Strategies

Unlock Success With Expert Candidate Screening Strategies

Candidate screening is a fairly common strategy among organizations that are actively searching for candidates to fill open roles. It’s a bit like a pre-interview, before the actual interview and serves as a way for a hiring manager, recruiter or other HR personnel to briefly evaluate job applicants ahead of time to determine their suitability for the position they’ve applied for.

The process typically involves checking the applicant’s resume or CV against their job application. While this can happen without involving the candidate, a screening call held over the phone or a video call helps a recruiter gain a good sense of what a person is like, learn why they applied for the job and more.

Here, we’re talking about why screening is essential and strategies to help you improve your process from start to finish.

Why Candidate Screening Is a Hiring Must

While screening can technically mean internally reviewing resumes, cover letters and other application materials, lots of employers take the opportunity to conduct a screening assessment. The process gives each qualified candidate a fair shot at showcasing their best characteristics ahead of the actual interview.

While it’s important that a job candidate is qualified for the role they’ve applied to, it’s too easy to dismiss someone with huge potential if you don’t chat with them first.

Here are just a few reasons why screening is a hiring must:

Hiring efficiency

Screening helps you narrow down the pool of applicants. These days, it’s not uncommon for certain jobs to receive upwards of 1,000 applicants.

Of course, you can’t hire all of them and there are surely some who aren’t qualified. By conducting screening calls, you can weed out candidates who aren’t an ideal fit, thereby saving time and resources by focusing more time-intensive hiring efforts on more qualified individuals.

Quality of hire

The quality of hire can determine how well an employee will perform in their role. If it’s not an ideal match, you risk turnover. Make a hiring mistake like this more than once, and it can start to cost your company big time.

Here are a few generally accepted industry figures about how much it costs to replace staff of varying levels of expertise:

  • Entry level: 30%-50% of annual salary
  • Mid-level: 150% of annual salary
  • Senior level: 400% of annual salary

By thoroughly evaluating candidates during the screening process, employers can identify individuals who possess the necessary skills, work experience and attributes required to excel in the role. This increases the likelihood of making successful hires who can contribute positively to the organization and may stick around for longer.

Compliance

Screening helps ensure that hiring decisions comply with legal and regulatory requirements, such as equal employment opportunity (EEO) laws and anti-discrimination policies. It helps prevent bias and ensures fair treatment of all candidates throughout the hiring process.

Cultural fit

Hiring the right candidate is more than just ensuring they’re technically qualified for the role. Culture goes a long way in employee satisfaction and retention, too! In fact, research shows that employees who feel connected to the workplace culture are 3.7 times more likely to be engaged.

Screening candidates allows employers to assess their values, attitudes and work styles to determine their compatibility with the organization’s culture. Hiring individuals who align with the company’s values and goals can foster a positive work environment and improve employee engagement and retention.

The Role of Tech in Candidate Screening

These days, employers have access to various types of tech tools to make screening and interviewing candidates a breeze. Not only that, but particular tools can streamline the entire hiring process from start to finish—from job posting to screening, interviewing and onboarding, and everything in between.

One exciting example of how employers are using technology to enhance the efficiency of candidate screening processes is an applicant-tracking system (ATS). An ATS is invaluable for streamlining hiring processes—just ask Fortune 500 companies, 97.4% of which say they use an ATS regularly.

Using an effective applicant tracking system helps hiring managers automate various aspects of the screening process, such as resume parsing, applicant management and candidate communication. Important hiring duties that recruiters completed manually in the past are now quicker, allowing them to filter and sort through large volumes of applications based on predefined criteria, saving time and effort.

What Criteria Should Recruiters Look for in Candidates?

This begs the question: What should recruiters be looking for, exactly? While specific criteria will depend on the job at hand, here’s what you should be on the lookout for, in general: 

  • Relevant work experience
  • Skills and competencies
  • Education and credentials
  • Growth potential

AI-Powered Screening Tools

As artificial intelligence becomes more powerful and useful for optimizing particular tasks, recruiting stands to benefit from advanced algorithms. AI and machine learning models can analyze resumes, cover letters and other application materials to automatically identify top candidates based on predefined qualifications and criteria.

With time already stretched thin and expectations of efficient and communicative recruiting processes, it’s only a matter of time before AI is a necessary tool—and we’re nearly already there.

Online Assessments

Online assessments are becoming more commonplace in the recruiting world. Ahead of a screening call, candidates can complete a self-direct evaluation highlighting their skills, knowledge and abilities. Assessments can be tailored to specific job roles to provide objective insights into candidates’ capabilities, helping recruiters make more informed screening decisions when the time comes to jump on a call.

Social Media and Online Profiles

Technology enables recruiters to leverage social media platforms and professional networking sites to gather additional information about candidates, such as their professional background, skills and interests.

Integrating social media and online profiles into the screening process can provide valuable insights into candidates’ qualifications and cultural fit.

Data Analytics

Advanced analytics tools can analyze recruitment data to identify trends, patterns and areas for improvement in the screening process. By analyzing metrics, such as time-to-hire and candidate conversion rates, recruiters can optimize their screening strategies and enhance overall efficiency.

Streamlining the Screening Process for a Better Candidate Experience

Effective hiring requires various steps—candidates want easy, fair and productive processes. To achieve this requires intentional and focused effort that spans the entirety of the system. Here’s how to do it:

  • Provide clear job descriptions: Not only do clear job descriptions ensure that potential candidates understand each job requirement, but they also reduce the likelihood of mismatched hires.
  • Have a simple application process: A simple application process makes it easy and efficient for candidates to apply. This helps attract a wider pool of applicants and improves the overall candidate experience.
  • Automate tedious manual processes: Automating burdensome manual processes such as scheduling interviews, sending out confirmation emails and collecting feedback saves time and reduces human error. Additionally, it allows human resource professionals to focus on more strategic tasks.
  • Communicate with candidates promptly: Prompt communication with candidates demonstrates respect for their time and helps keep them engaged and informed throughout the hiring process. Incorporating texting also increases the odds of your messages being received and read.
  • Avoid leaving candidates hanging too long after the screening: Leaving candidates hanging after the screening process can damage your reputation as an employer and deter qualified candidates from applying in the future.
  • Gather feedback: Collecting feedback from candidates about their experience during the recruitment process provides valuable insights for identifying areas of improvement, helping you refine recruitment strategies and ultimately attract and retain top talent.
  • Commit to continuous improvement: Developing better, more efficient processes is key to recruitment, ensuring that your organization remains competitive in today’s increasingly aggressive job market.

Improve Your Candidate Screening Process With an All-In-One Platform

Screening is just one, albeit important, part of the recruiting puzzle. With ApplicantStack, hiring managers can streamline all aspects of recruitment, from candidate sourcing to onboarding.

Utilize pre-screen and knockout questions to qualify candidates even before the official screening—so only the best candidates for the job are presented to you. Post-screening, communicate any next steps easily with email notifications and text messages to keep candidates engaged and excited.

Sign up for a free trial to see how ApplicantStack can help you hire qualified candidates, faster.

Understanding Contract-To-Hire and How It Works

Understanding Contract-To-Hire and How It Works

In the world of work, talent acquisition takes on many forms beyond the typical direct, permanent-employee route. One of those alternative options is called contract-to-hire. This hiring arrangement brings an employee on board as a contractor for a predetermined period.

In this blog, we’re discussing everything you need to know about a contract-to-hire arrangement, including how it works, why it can be beneficial for your organization and how it compares to other hiring practices.

What Is Contract-To-Hire and How Does It Work?

Simply put, a contract-to-hire arrangement means that an individual is initially hired as an independent contractor with the possibility of being brought on as a permanent employee once the contract is up. During the contract period, the individual typically works on specific projects or tasks. They generally have the same responsibilities and expectations as a regular, permanent employee. But on paper, they’re still an independent contractor.

At the end of the contract period, the company will evaluate the contractor’s performance, skills and cultural fit within the organization. They use this information to determine whether they would like to offer them a permanent position.

It’s a little unconventional, but a contract-to-hire arrangement can actually work in favor of both the contractor and the employer in different ways. For example, this type of arrangement allows both the employer and the contractor to assess each other before committing to a long-term employment relationship. From the employer’s perspective, they might think:

  • If given the opportunity, would this person be a good fit for us?
  • Does this candidate have the skills and experience demanded of the role?
  • How do they get along with other employees?

On the other hand, the contractor may ask themselves questions like:

  • Can this employer meet my needs in terms of compensation, job satisfaction and professional development?
  • Do their values and culture align with my own?

Questions like these, and more, are examples of what contractors and employers can discover about each other throughout the contract-to-hire process.

Industries Where It’s Common

Contract-to-hire is common in industries with high demand for specialized skills. It’s also useful when companies want to manage risk before making a permanent hiring decision.

You might see these types of roles in:

  • Information Technology (IT): IT companies often hire contractors for specific projects or to fill temporary skill gaps. Software development, cybersecurity, network administration and data analysis are roles that are frequently offered as contract-to-hire opportunities.
  • Healthcare: Hospitals, clinics and healthcare organizations often utilize contract-to-hire arrangements. Roles include nurses, medical technicians, therapists and administrative staff.
  • Finance and Accounting: Financial institutions and accounting firms may hire contract workers for tasks such as auditing, financial analysis, tax preparation and project management.
  • Creative and Media: Advertising agencies, design firms and media companies often employ contractors for roles in graphic design, content creation, video production and marketing.
  • Engineering and Construction: Engineering firms and construction companies frequently hire contractors for specific projects or to address short-term staffing needs. The roles may be in civil engineering, project management and construction supervision.
  • Education: Schools, colleges and educational organizations sometimes hire instructors on a contract to fill temporary vacancies or meet fluctuating demand.

No matter the industry or specialization, here’s how these arrangements typically unfold at a glance:

  1. Employers identify a need for additional resources or talent.
  2. Recruiting strategies begin.
  3. The employer identifies a suitable contactor and contract negotiation begins.
  4. Onboarding starts.
  5. The contractor carries out their duties.
  6. At the end of the term, the employer evaluates the contractor.
  7. The employer makes a hiring decision.
  8. The contractor transitions to a full-time employee.

What’s the Difference Between Direct Hire and Contract-To-Hire?

Permanent employees and contract-to-hire folks typically share similar job responsibilities and are treated nearly the same. It can be difficult to determine the difference between a full-time position and a contract role. The main differentiators are the employment relationship and the timing of the hiring process. Now that we know the conditions of contract-to-hire arrangements, here’s how direct hires compare:

  • Initiation: In a direct hire arrangement, the employer hires an employee directly into a permanent position without an initial contract period.
  • Intention: A direct-hire employee is typically hired with the intention of a long-term employment relationship from the outset, whereas contract workers aren’t necessarily expected to stick around afterward.
  • Timing: The hiring process for direct hires usually involves standard recruitment procedures, such as job postings, interviews, background checks and negotiations of salary and benefits. For a contract role, workers are typically head-hunted or found through staffing agencies.
  • Tenure: Direct hires are expected to remain with the company for an indefinite period, whereas those who start as contract employees may leave sooner, depending on their contract terms.

The Potential Value

There are more than a few good reasons why some employers opt for contract-to-hire arrangements. Examples include:

  • Access to specialized skills and experienced workers: Employers can access specialized skills and expertise temporarily through contract-to-hire arrangements. As such, they can address short-term needs or projects that require specific technical or niche skills without hiring permanent employees.
  • Risk mitigation: By initially engaging contractors on a temporary basis, employers can mitigate some of the risks inherent to direct hiring. These arrangements allow employers to assess the contractor’s performance, skills and fit within the organization before making a long-term commitment.
  • Reduced administrative burden: Hiring contractors through staffing agencies or as independent contractors can reduce the administrative burden associated with payroll processing, taxes and compliance with labor regulations. In this type of arrangement, this responsibility often falls on the staffing agency or the contractors themselves.
  • Agility: By engaging contractors temporarily, employers can respond more quickly to changing market conditions, project deadlines or business priorities. They can adjust their workforce size and composition as needed to stay competitive and adapt to evolving circumstances.

Common Challenges With this Hiring Model

Of course, reaping the benefits of this hiring arrangement isn’t without its challenges. Since contractors are, on paper, working for themselves and providing a service to your organization, employers may lack control over how jobs get done.

So, let’s start there before outlining a couple of other common challenges:

  • Limited loyalty and engagement: Unfortunately, some contractors may not feel the same level of loyalty or commitment to the organization as permanent employees, especially if they are uncertain about their long-term relationship with the company. This may affect their engagement, productivity and collaboration with colleagues.
  • Job security: According to a recent survey, 85 percent of employed individuals express worry about their job security in 2024. With the cost of living at an all-time high, contract roles may be less appealing to those looking for long-term reliability in their employer.
  • Limited pool of candidates: Finding qualified contractors who are willing to consider contract-to-hire positions can be challenging. Some candidates may prefer the stability of permanent employment or may be hesitant to take on temporary roles with uncertain long-term prospects.
  • Competition from other organizations: Employers may face competition from other companies offering permanent positions, particularly in industries or regions with a high demand for talent.

Contract-To-Hire FAQ From Employers and Contractors

Still, have questions about contract-to-hire arrangements? We’ve got answers:

Can Contractors Quit a Contract-To-Hire Arrangement?

It depends on the contract terms. In some cases, yes, contractors can quit a contract-to-hire arrangement. Howeverm the process and implications may differ depending on the terms outlined in the contract and any applicable employment laws.

It’s also important to note that, while it’s possible in some circumstances, quitting early may strain the employer-employee relationship or damage a contractor’s reputation. So, read the contract carefully!

What Should Be Included in a Contract-To-Hire Agreement?

A contract-to-hire agreement should include any essential details that are pertinent to the job at hand, as well as conditions for employment and a termination clause. At the bare minimum, it’s good to have:

  • The contract period (start date and end date).
  • Scope of work.
  • Compensation.
  • Evaluation criteria to be eligible for full-time employment.
  • Confidentiality and non-disclosure information.
  • A termination clause.

Finding the Right Candidates for Your Open Roles

ApplicantStack is built for better hiring practices across the board, including seeking and securing the perfect contract-to-hire candidate for your job opening.

With this type of work arrangement, employers typically want to move quickly. Whether there’s a looming deadline or a special project that needs to be completed ASAP, finding, hiring and onboarding the right contractor has never been easier. To learn all about how Applicantstack can streamline your hiring and onboarding processes no matter the arrangement, check out our self-guided tour.

You can also get started on a free trial with no strings attached.