Now that I have your attention from the headline, let me rephrase that: Contracts-to-hire need to go away.
We need to get rid of them.
We need to kill them.
They are passé.
Contracts-to-hire were created by companies that wanted to try out an employee before actually hiring them for work traditionally called "management" work (vs.
"hourly" work) for work performed by college-educated people.
Prior to trying this type of hiring method, companies either hired employees for full-time, permanent work or brought on independent contractors for project work.
People chose which group they wanted to belong to based on their chosen fields (i.
e.
some fields are not conducive to independent contracting) and based on their risk-to-freedom needs (i.
e.
employment is less risky than contracting; and contracting has more freedom than employment).
During the 1990's, some independent contractors took full time employment jobs with their client.
Most contractors are placed by contracting firms which find the project work, find the contractor, and take an hourly fee for the placement.
Once companies started hiring contractors as employees, agreements were written between the contracting firm and the client stating that if the client hired the contractor within a certain timeframe, the contracting firm received a certain percentage of the salary as a recruiter's fee.
Why would the contractor take the full time job? Mostly because they found that they really liked the company where they were performing the project work and they were willing to give up the contractor freedom for more security.
With that set-up, many contractors took jobs with the client.
The clients found that in this type of scenario, they got to "try out" the contractor without actually hiring them (and possibly having to go through the difficultly of firing a person early-on who didn't work out well).
Thus, Contract-to-Hire was born.
So what's wrong with Contract-to-Hire now? The biggest problem coming down the pike is that people born between 1976 and 1986 (our newest post-college crowd, as I write this) sees themselves as consumers in more aspects than their elders ever dared to dream.
When I graduated from college, we were in awe of anyone offering us a job.
There was very little negotiating.
We got what we were offered.
("All this and I get paid too?") A former sorority sister of mine is now a trustee at our alma mater.
She told me that this generation views themselves as consumers.
The want to know all about what the college has to offer them way beyond academics and sports.
(Meanwhile, we were thrilled to have a big ol' black rotary dial phone in our dorm rooms!) This generation is much more demanding from a consumer standpoint.
So what makes employers believe that this consumer-driven mindset is going to change once these folks graduate from college and enter the work world? This generation is either going to want to be employees of a company, without being "tried on for size" temporarily; or they are going to want to be independent contractors from the get-go.
They don't want to wear the temporary, in between, employer-gets-to-try-me-out hat that some employers want them to wear.
I'm calling on employers everywhere: "Kill" your Contracts-to-Hire before this new generation surprises you by passing up on your offers.
Get back to: 1) Hiring for full time employment (without the temporary pre-nup) and 2) Using independent contractors for project work (and not expecting them to become employees).
We need to get rid of them.
We need to kill them.
They are passé.
Contracts-to-hire were created by companies that wanted to try out an employee before actually hiring them for work traditionally called "management" work (vs.
"hourly" work) for work performed by college-educated people.
Prior to trying this type of hiring method, companies either hired employees for full-time, permanent work or brought on independent contractors for project work.
People chose which group they wanted to belong to based on their chosen fields (i.
e.
some fields are not conducive to independent contracting) and based on their risk-to-freedom needs (i.
e.
employment is less risky than contracting; and contracting has more freedom than employment).
During the 1990's, some independent contractors took full time employment jobs with their client.
Most contractors are placed by contracting firms which find the project work, find the contractor, and take an hourly fee for the placement.
Once companies started hiring contractors as employees, agreements were written between the contracting firm and the client stating that if the client hired the contractor within a certain timeframe, the contracting firm received a certain percentage of the salary as a recruiter's fee.
Why would the contractor take the full time job? Mostly because they found that they really liked the company where they were performing the project work and they were willing to give up the contractor freedom for more security.
With that set-up, many contractors took jobs with the client.
The clients found that in this type of scenario, they got to "try out" the contractor without actually hiring them (and possibly having to go through the difficultly of firing a person early-on who didn't work out well).
Thus, Contract-to-Hire was born.
So what's wrong with Contract-to-Hire now? The biggest problem coming down the pike is that people born between 1976 and 1986 (our newest post-college crowd, as I write this) sees themselves as consumers in more aspects than their elders ever dared to dream.
When I graduated from college, we were in awe of anyone offering us a job.
There was very little negotiating.
We got what we were offered.
("All this and I get paid too?") A former sorority sister of mine is now a trustee at our alma mater.
She told me that this generation views themselves as consumers.
The want to know all about what the college has to offer them way beyond academics and sports.
(Meanwhile, we were thrilled to have a big ol' black rotary dial phone in our dorm rooms!) This generation is much more demanding from a consumer standpoint.
So what makes employers believe that this consumer-driven mindset is going to change once these folks graduate from college and enter the work world? This generation is either going to want to be employees of a company, without being "tried on for size" temporarily; or they are going to want to be independent contractors from the get-go.
They don't want to wear the temporary, in between, employer-gets-to-try-me-out hat that some employers want them to wear.
I'm calling on employers everywhere: "Kill" your Contracts-to-Hire before this new generation surprises you by passing up on your offers.
Get back to: 1) Hiring for full time employment (without the temporary pre-nup) and 2) Using independent contractors for project work (and not expecting them to become employees).