Hiring Engineers: Contract-to-Permanent Strategy

The latest job statistics show that unemployment continues to decrease as more businesses are starting to emerge from their holding patterns.

In September 2022, the Bureau of Labor Statistics (BLS) projected that engineering jobs will grow by 7% between 2021 and 2031. However, general employment statistics usually lag behind economic trends, while the hiring of temporary employees more closely mirrors economic activity.

According to Tonya Tatro of SHRM, “The current economic crisis is continuing to change the employment landscape, and employers need to be strategic to achieve business goals. Hiring talent from among a contingent workforce can reduce the risk of making bad hiring decisions, which can be costly and time-consuming.”

Engineers are in high demand, so companies need a good hiring strategy to compete for scarce talent. One of the key methods hiring managers can use to build a pipeline of potential talent is contract-to-perm hiring. We’ve outlined some of the top reasons for utilizing a contract-to-perm strategy for engineers.

5 minutes

1st of April, 2023

What is Contract-to-Perm for Hiring Engineers?

Many job offers through talent placement agencies are classified as “contract-to-perm." This type of offer consists of an agreement that for a given time period (e.g., 3 months or 6 months) the employee will perform the job for an hourly rate, in the hopes that the company will convert him or her to permanent status after the contract term has elapsed.

Typically, a company that needs to minimize their upfront hiring processes will utilize a contract-to-perm hiring strategy. Companies can save money on hiring processes such as paying for job postings and job descriptions to be created, along with the time and cost savings of reducing the interview process.

It's important to note that even though the company has a vested interest in converting the employee to permanent status, there is no guarantee that this will happen. The employee may continue on as an hourly employee, with the hope of converting later on. Or the employee could be laid off, either because company priorities have shifted, or for poor performance.

Benefits of Contract-to-Perm for Businesses

A contract-to-perm hiring strategy provides several important benefits to employers. First, it gives them the opportunity to get a feel for the talent before they bring the person on board permanently. When the company utilizes a contract-to-perm strategy, they have a pool of potential candidates that is filled with experienced engineers.

The job requirements for many positions in the engineering role depend not only upon specific technical skills and knowledge, but also on less quantifiable “soft skills," such as flexibility, teamwork, oral communication, and growth potential. These attributes can make or break the new employee's ability to work with the existing engineering team to accomplish their long-term goals, and a short-term temporary position gives the company assurance that it is not making a costly error.

Second, contract-to-perm engineering jobs may give companies a leg-up on the competition by allowing them to move quickly to offer a position to top engineering talent, before completing the time-consuming hiring process required to bring on a full-time permanent employee. In this way, the company may have a better chance of recruiting great engineering candidates whenever available and follow up with further paperwork later.

Another benefit of contract-to-perm engineering hiring is contingency planning and management. Companies use temporary employees to quickly meet changes in demand for products and services. At the same time, by maintaining a pool of temporary and contract workers, they have a ready source for hiring permanent engineering candidates as company finances fluctuate and business plans and goals change.

Benefits for Job Seekers

Contract-to-perm engineering hiring provides benefits to job seekers as well. For those needing short-term, flexible work, it gives them the opportunity to gain new experience and earn good pay, without making a long-term commitment to a company or a specific career path. At the same time, contract employees can evaluate the employer and the job to determine whether they are a good fit.

Another benefit for job seekers is the fact that employers don't have as much to lose financially and legally when onboarding temps versus permanent employees. In this situation the company may “settle" for someone who is a good engineer but may not fit all the desired qualifications, giving that person an opportunity to prove herself on the job.

For example, non-traditional job seekers include newly retired military vets transitioning to the civilian workforce. In many cases, it is difficult for them to explain their hard-earned skills to an HR staff unfamiliar with military organizational structure and technology. The short-term temporary position could solve this problem, as the employer can evaluate the vet's abilities and experience in action.

On the other hand, subject matter experts in the exact hardware or software the company requires, who are less well-rounded in terms of soft skills, may also benefit from contract-to-perm. With a good track record, the company may give you the opportunity to prove your worth, and eventually move they to permanent status.

If your company is ready to hire great engineers, but not in the position to offer a permanent position, a contract-to-perm hiring strategy for engineers may be the perfect option.