Temp to Perm Hiring: Good Idea, or Something You’ll Get Burned By?

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May 12, 2015

Have you ever wanted to have a person work for you on a temporary basis before making the commitment to hire full-time? Many of you probably shook your head, yes, especially when it comes to hiring non-management level positions.

And why not? It is common to get burned by hiring people who do not work out despite appearing like good hires from the interview process.

Being able to see how a person actually performs on the job and fits into your environment before hiring has great intuitive and practical appeal.

When hiring temps goes bad

In addition, many people have had successful experiences with this approach or have known people who have had positive outcomes using “temp to perm” hiring. However, like many things that have worked in a specific situation, it is easy to think you can use it for everything, only to have it backfire.

You can easily run into the “man with a hammer syndrome”: Give a man a hammer and pretty soon, everything starts looking like a nail! When temp to perm becomes the hammer, it is common to incur hiring damage, especially when you use it for hiring people who are in high demand and low supply.

This is the case for many positions such as accounting, IT, Sales, and other roles where candidates who fit your position are in short supply. We frequently see the frustration of companies that use this approach for high demand, low supply positions, reaching for candidates that fail within two weeks, only to lunge at a replacement who bombs within a month. The time, money and effort lost when this occurs is unfortunate and usually preventable by employing more effective tactics like personality assessments.

A recent Wall Street Journal article pointed out that eight (8) of the top 10 U.S. private employers now use personality assessments for some positions. In 2001, 26 percent of large U.S. employers used these tests. By 2013, that number jumped to 57 percent, reflecting “a sea change in hiring practices,” the article pointed out.

Limits to Temp to Perm hiring

Here are a few key limitations to Temp to Perm hiring:

  1. Limited candidate pool — Hiring temp to perm almost always limits your company to candidates who are unemployed. Employed candidates very rarely leave a full-time position for “temp to perm.” With a low unemployment rate, you have likely cut yourself off from 95 percent of the viable candidate pool.
  2. Not always the best candidates — The unemployed candidate market has a larger percentage of people who are unemployed for performance or other issues than the employed market. Therefore, you may not be getting the cream of the crop.
  3. Likely to leave for full-time work — When you are competing for a strong, marketable candidate who receives offers of full-time employment with benefits from other companies, they are more likely to leave for the full-time job. A verbal commitment that the person will not leave while being a temp does not give any real assurance.

A sensible approach

Temp to perm hiring is more applicable when hiring candidates in an occupation that has a good supply of quality, unemployed candidates. Though in today’s tightening job market, this is rarely the case

If you do find yourself in this situation, this approach can be sensible. In addition, if your job does not require a high level of skill or experience, you have greater odds of success with hiring unemployed candidates temp to perm.

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