The 6 Types of Contract Placements

Contract staffing is not just a singular service offering that you can add to your business model.

It provides a variety of ways to help solve your clients’ unique staffing issues.

In fact, there are six commonly recognized types of contract placements that you can offer to your clients, and those six are listed below:

1. Traditional contract staffing:

• Recruiter gets contract job order and locates candidates.
• Client selects candidate.
• Recruiter negotiates rates with client and candidate.
• Contractor becomes employee of a staffing firm/contract staffing back-office.

2. Temp-to-direct hire conversions:

• Contractor is placed on contract with the intention of eventually being converted to a direct hire. Allows client to “try-before-they-buy” to ensure the candidate is a fit before making the direct hire commitment.
• Recruiter receives hourly profit for every hour the contractor works AND a conversion fee when they go direct.
• Contract period typically lasts 6-12 months.

3. Payrolling for non-recruited candidates:

• Client has a short-term need (3-12 months).
• They have already located a contract candidate.
• Client  outsources employer responsibility (payroll, taxes, Workers’ Comp, employee benefits, etc.) to a staffing firm/contract staffing back-office.
• Recruiter earns less hourly income, but because there is no recruiting involved and there is less work!

4. 1099 independent contractor to W-2 employee conversions:

• The Internal Revenue Service is cracking down on companies that incorrectly classify W-2 employees as 1099 independent contractors (ICs).
• Recruiters should educate clients on the difference between ICs and employees.
• If the client has misclassified ICs, the recruiter can convert them to a W-2 employee and outsource the employment of the employee to a staffing firm/contract staffing back-office.
• Recruiter earns less hourly income, but because there is no recruiting involved and there is less work!

5. Retiree re-staffing:

• Companies retain or gain the skills and experience of a retired worker by bringing them on as a consultant on a contract basis.
• The retiree becomes an employee of a staffing firm/contract staffing back-office.
• Retirees enjoy the flexibility, supplemental income, and opportunity to remain active in the workforce.

6. Internships/co-ops:

• This is for college students and graduates trying to gain real-world experience.
• Clients avoid payroll and human resources issues associated with short periods of employment by making the interns contractors who are employees of a staffing firm/contract staffing back-office.
• This is a viable alternative to unpaid internships.

For more information about the different types of contract placements, call TEC at 888.627.3678.