IT Contract-to-Hire: Everything You Need to Know

When it comes to fulfilling your company’s IT needs, you have many options — including contract-to-hire. A growing trend among tech companies and across industries is to hire contract employees. In fact, some estimate that about 50 percent of most tech firms’ teams include contractors. Learn about some of the pros and cons to this staffing alternative to help you decide whether using an IT contract-to-hire position makes the most sense for your organization.

What Is a Contract-to-Hire Position?

With a contract-to-hire position, the candidate is placed in a short-term position for a specified duration of time, with the expectation that the company will hire the contractor as a direct, permanent employee at the end of that contract if all goes well. The contract could last as little as a month and as long as several years, but most contract-to-hire positions average 3 to 12 months in length.

If you use a staffing agency to fill the contract-to-hire position, the candidate will be a W-2 employee of the agency.

What Are the Advantages of an IT Contract-to-Hire Position?

Companies opt for contract-to-hire because of benefits like the following.

Expedited Hiring Process

Contract-to-hire might be the right choice for your business if you need to fill an immediate gap in your IT capacity. Leveraging a recruiting agency to fill a contract-to-hire job relieves your business from the tedious and time-consuming task of finding and vetting a suitable candidate. Also, since contract-to-hire candidates can start working without a lengthy interview cycle or typical onboarding processes, they can start producing value for your company sooner.

Less Risk

Hiring staff as contract-to-hire minimizes the risk inherent in a direct-hire situation. A contractor situation allows for a trial run to determine if the employee is a good fit in the long-term. Structuring the position as contract-to-hire also allows you the chance to assess the ongoing need for the role in your company. During the contract term, both you and the employee have the chance to assess the other. If you decide the candidate is not satisfactory, you simply terminate the relationship, without suffering the expense of resources and time invested in hiring and training a poor hire.

Budget and Staffing Flexibility

One significant benefit of contract-to-hire is the flexibility such a position allows within budgetary constraints. Hiring IT staff on a contract-to-hire basis allows companies to work a full-time position into the budget, while still getting the work done in the interim. Most contract-to-hire positions are hourly and without benefits, which saves in the short-term. Hiring contract staff also allows for flexible staffing, helping you meet your exact capacity needs, such as for seasonal or project-based fluctuations.

Specialized Skills

Bringing on contract-to-hire IT staff can help you complete projects that require specialized skills that your full-time staff do not have. Therefore, hiring IT contract-to-hire employees allows you to fill this skills gap efficiently and effectively, whether you anticipate continuously needing those skills or only need them for a short period.


Contract-to-hire allows you to quickly scale your business capacity, especially during times of rapid expansion. Hiring on a contract basis also provides you protection against future uncertainty inherent in most businesses. You can hire staff for the short-term, allowing you to easily scale back down once a project ends, in case of an economic downturn, or when your business’ IT needs shift.

Are you wondering whether a contract-to-hire makes sense for your business? Contact Locus Recruiting for more information about your IT staffing needs and for answers to your questions about IT contract-to-hire.