Contract To Hire - Pros and Cons
Vartika Srivastava

Wed, 01 Feb 2023

Contract To Hire
Contract to Hire has gained much popularity in recent years as the global market dynamics changed with the advent of pandemic. Commonly termed as “temp to hire”, contract to hire allows both parties to try out the suitability of the role. Typically, the contract includes the period of service. At the end of which, the employer may extend or employ the candidate full time.

Contract-To-Hire Models

Some of the industries that commonly use Contract-to-hire models are:
-Graphic Designing
-Project Management
However, the contract to hire model was not much in trend some years ago but with the post-pandemic economic shifts, several organizations are preferring this over permanent employment. It gives them the flexibility to strategize and methodize different approaches to attain maximum growth.

Pros of Contract To Hire Agreements

Some of the pros of contract-to-hire agreements are:
  • It gives a chance to the employer check the efficiency of the employee before hiring full time or sustaining for a longer period of time
  • It lets the employee decide whether the job role is suitable for him/her
  • It lets the employee gain professional experience of a particular role and organization before settling down with it in the long run
  • It gives the employee an opportunity to associate with various organizations and learn a variety of skills/jobs 
  • It gives the liberty to the employee to build their career as they wish without any organizational boundaries
Given the fact that millennials nowadays do not stay associated with one organization for a very long time as well as the organization’s dynamic policies in the post-pandemic phase, contract to hire is gaining much popularity lately. With the flexibility to work, it gives much freedom to both the parties to test and try what works best for them.

Cons of Contract To Hire Models

As everything has some pros and some cons, the C2H models too has some cons. Let us look at the cons that contract to hire process includes:
  • It creates uncertainty in the mind of the employees as they may not be sure of their stability and efforts invested in the organization they are hired for
  • Lack of job security is something that an employee may foresee in contract to hire agreement as there are high chances that the organization may not retain them and let go by end of contract
  • In such a situation, the employee may not be fully committed as they may feel that their efforts put in the job may prove to be futile in future
  • The organizations may lose their sensitive data/information if the employee has some ill intentions and is not fully committed to the organization 

Frequently Asked Questions (FAQs):

How long does a contract usually last?

The time period of the contract may vary depending on the job role, skills that the employee has, and the organization’s need. Typically it may last from 6 months to 12 months. 

Who pays the employee on contract?

The employer an employee is engaged with, will pay the salary of the employee on contract. 

What are the benefits of a contract-to-hire for an employer?

It lets the employer evaluate the performance of the employee and thereby decide whether he/she is suitable for the particular job. 

What are the benefits of contract-to-hire for employees?

It allows the employee to test and try out the work culture and job role before committing to them full-time. 

What happens when the contract ends?

At the end of the contract, if the employee is further required his contract may extend or he/she may be hired full time. On the other hand, if the employee is not suitable for the job or the contract he is associated with is coming to an end, he may be terminated at the end of the contract.
Vartika Srivastava
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Assistant Manager - Marketing
Vartika has a flair for writing and is passionate about helping people find solutions with her articles.