Tech Companies Favor Contract-To-Hire Workers- Try Before You Buy

It’s amazing the things you learn when you sit next to a sales team.

For several years, I worked at a company where my desk was next to them. They had a really interesting sales technique called “try and buy.” It was pretty simple. The company would install a system and let a customer use it for free for 90 days. After the trial period, either the customer would buy the system or the company would take it back.

It was hugely effective. Most customers were surprised when their 90 days was up and wouldn’t dream of giving up the system. So they paid for it. The customer received a system they were familiar with and understood how to get their money’s worth from it and the company made a sale.

This “try and buy” sales technique worked because the product was expensive and usually required a big customer commitment to manage it appropriately for about three to five years.

Sounds kind of like a job, doesn’t it?

A job often lasts several years, it’s expensive for the employer, it’s a lot of time for the employee, and it requires a commitment from both sides to work together appropriately. You never really know if you’re going to like a job, or an employee, until everyone’s worked together for a few months.

Good news! Try and Buy for Employment

Try and buy exists for employment. It usually takes two forms: contract-to-hire, or a probationary period. The details vary, but the basic idea is that there is a defined “trial period.”

Technology companies rely on IT contract-for-hire workers at a greater rate than other industries, according to data from Dice Holdings.

For example, only 8 percent of jobs listed on eFinancialCareers called for contract finance workers, whereas a sizable 48 percent of jobs listed on Dice.com were for IT contractors.

And of the IT contract jobs listed on Dice.com, 27 percent were for contract-to-hire positions.  “Try and buy” can be a good way to turn a contract job into a permanent position, because the employer may start to wonder, “How can I live without this person?”

Also, at the end of an initial contract or probation period, both the employee and the employer can take a step back and decide if this is really working out. If yes, then the job goes on. If no, then everyone walks away. No harm, no foul.

Comments

  1. I like this article about “Try and Buy for Employment”. But like anything else it has its pros and cons. As a new Computer Science graduate I just want a fair opportunity to prove what I can bring to the table for any company that hires me.

    • BY sue smaller says:

      The temp-to-hire situation has the potential for huge fraud, as I recently found out.

      I love my work, and, judging from the excellent appraisals and number of formal awards I have received, I am very talented.

      However, I was recently terminated by the Government Agency where I had worked for four years after that agency came under Congressional investigation for fraud. I won’t go into all of my awards and accomplishments…it’s a long list. Just suffice to say, I was devastated when it all ended, and I was left dangling on my own in D.C., all friends and family all the way across country.

      I took some time off to put myself back together. I actually was getting a fair amount of activity generated by my resume and was getting some interviews. I almost landed a permanent gig, but I didn’t do the greatest job of selling myself.

      Enter stage left a contract to perm consulting company that represented their openings as a way to get into Farmers Insurance. Farmers was located in a great place..Mercer Island. The interview with the consulting firm was more like an advertisement than a job interview. I had a quick interview with Farmers manager, we hit it off, and I was Seattle-bound!!!

      The contract was supposed to last six months, then, the contracting outfit told me that Farmers would almost sure to hire me. I performed spectacularly, getting outstanding feedback from coworkers and managers. Every week I met with the Senior Account Executive, who assured me my job was supposed to be permanent, and I could look forward to getting hired. My manager at Farmers said much the same thing. Then, a month before the end of my contract, came the switch. The Senior Account Executive at the consulting company informed me that Farmers had a “hiring freeze,” and that they were only doing some selective hiring of some candidates. However, they had agreed to extend my contract by six months and they were still looking to hire me permanently.

      I’m furious. I worked really, really hard. I think I was seriously misled, and I am thinking of seeing a lawyer. All along, the Senior Account manager kept telling me I could expect an offer. Then came this “hiring freeze.” But, rest assured, my contract was extended because Farmers wants to hire me…

      If I hadn’t tried to move to take this job, I wouldn’t be so angry. I bought a car based on information and feedback I was getting. I’m now stuck between two cities, Seattle and D.C., with most of my things still in D.C.. I was going to commit to a six month lease on Mercer Island, but now I don’t think I can trust either Farmers or the consulting company. As it turns out, almost no contractors make “associate.” Over half the people in IT are contractors from India who have been there, at most, two years. The last person hired by Farmers on a contract to hire was seven years ago. I believe there was no intention of ever hiring me.

      I’m not just a nobody in my industry. I know a lot of people in high places. So it’s insulting that Farmers and the consulting firm would try to perpetuate this fraud on me.

      I have not a clue as to how Farmers management or employees benefit from this little ruse.

      IT involves a very high learning curve, probably one of the steepest of all the industries. So, basically, one of the farmers employees has been worked to the bone to bring me on board. She took two years to learn the job. I’m smart, and I am supposed to come up to speed in less than six months. But, should I leave to take a permanent position, she has wasted six months of her time training someone who now won’t stay.

      On top of all this, I have been staying at an extended stay for six months. It’s depressing.

      Once I am rid of these two fraudsters, the consulting company and Farmers Insurance, I’m going to talk to the FTC, and whereever else fraudulent business practices get reported.

      The big mystery is how the heck does Farmers benefit from all of this??? I understand I am in the midst of Microsoft territory, a known outlaw, but that doesn’t excuse this kind of behavior.

  2. BY Patrick says:

    Only scrub Developers need to resort to contract-to-hire. The best don’t need to lower themselves.

  3. BY cc says:

    Only a desperate developer would quit a full time job to go contract to hire. But with so many unemployed software engineers, I bet plenty of people will do anything for a job.

    • BY James says:

      I agree 100% cc

    • BY Aaron McManus says:

      except when the contract position offers 2-3x as much per hour as the employee one, and the work is far cooler than the current job and will boost the resume. most “full-time jobs” are pretty unstable – a lot of folks benefit by going rogue agent. :)

      • BY User says:

        The contract to hire positions pay more because you’re responsible for your retirement, insurance, no sick pay, etc

  4. BY Catherine Powell says:

    I’ve also seen people use this for making big career moves: the first management job, or the first team lead job, or the first job in a new industry. That way the employee can see if they actually like it (or management stinks, back to coding!). The employer is more likely to take a chance on a newbie if there’s an out, too.

    I love a situation where everyone wins!

  5. BY RMS says:

    There is nothing new about a 90 day probation period, in IT or elsewhere.

    • BY Pete says:

      Most white collar professions do not do contract-to-hire. But in a field with an extreme surplus of workers, an employer can get away with it.

      • BY RMS says:

        I was/am not specifically referring to a contract-to-hire, but a 90 day probation. The problem I see with contract to hire is you, as an employee, can find yourself “stuck” in contract-land and never being hired as a FTE.

  6. BY Proud Paulbot says:

    I would not call contract work “Try Before You Buy.” In nearly all cases, the client company has no intention at all of hiring the contractor. They are generally being brought in to complete a specific project, and once the project is done, there is no more work for them.

    In addition, many companies are now using perpetual 1099 workers because they are cheaper than employees. The company does not have to pay for healthcare or any other benefits, workers’ compensation or Social Security/Medicare. They also don’t have to pay out unemployment if they decide to get rid of the contractor.

    • BY JadedOptimist says:

      Are you saying the 27% of contract postings listed as contract-to-hire have a high percentage of employers that do not really intend to hire the contractor?
      How could you know this? Source please.

      • BY Proud Paulbot says:

        How could I know this? Because I’m a REALIST, not an optimist.

        Most economists agree with me. Full-time jobs with benefits are going the way of the horse & buggy, and we are moving into the Age of the Temp.

  7. BY Richwest101 says:

    Actually, as a supervisor with a few contractors working for me, I do know that my upper management has had a contractor wotking for me with no intention of hiring him full-time. He doesn’t get benefits which can hurt someone without medical benefits from any other source. As a family man with small children myself, I canot hold a contract position. The health and safely of my family is at stake. If a national holiday comes up, the contractor does not get paid when everyone else is enjoying a paid holiday with their family. If they get sick or need a day off, the won’t get paid for it. It’s not a good situation for my contractors when their coworkers are getting a paid holiday or their child get’s sick and the can take them to the doctor under their sick time and medical coverage. No, the contract-to-hire position is sometimes a carrot to dangle in front of a less costly employee. I am pushing to hire my contractor full-time with benefits, no matter how short the tenure for him may be. He works just as hard and long as any other full-time, benefitted employee.

  8. BY Danielle says:

    Everyone does not win in this scenario. If contractors “try before they buy” they don’t get to choose to go permanent. Only the company gets to choose. And believe me, you don’t need a source to know that companies are not hiring anymore. I sit next to a project manager who has worked here for six years as a “contractor.” They will keep her forever, tell her what to do, how to do it, and when to do it, but they will never hire her. And if contractors find a project to be less than stellar in the first 90 days and choose to move to a different project, they are penalized by recruiters and staffing agencies for not staying in a position. The only people winning here are the greedy employers.

  9. BY sue says:

    My contract to hire came to a sudden and traumatic
    end a week ago. It was a horrible process, worse than getting laid off. My manager at the insurance company where I worked had nothing but praise for me and my work.
    He kept stating he was going to hire me, but six months came and went with no offer.

    The time frame kept getting movedout.
    I have to say, I enjoyed everything about the job, but the stress
    Of having to stay a temp was getting to me.

    Then, suddenly, contractors were asked to work nights in addition to days. For two decades, contractors had not had to do night shift work. I am not capable of night shift work, and I had been led to believe that it was negotiable.

    so I approached my manager at the insurance company about it.

    It turned out not to be negotiable, and I was fired two days later.
    I suddenly found myself in a finger pointing exercize with everyone blaming me for nit understanding job requirements.

    its the first time I’ve been fired and it was poorly done.
    it was done in public, with coworkers looking on.
    The head of the temp agency said, with a smile that
    my manager at the insurance company wished to sever our relationship. He also defamed me to the temp agency.

    I’m still reeling from this. I think temp to hire really do everyone a diservice, especially the employee. If a problem arises, huge misunderstandings result because there is a third party in
    The middle. The employer, having access to an infinite supply of
    Employees from overseas, can terminate people without any thought at all.

    I worked hard, had done well, only to find myself in an untenable situation. I was really getting tired of working for the temp agency anyway. The person I reported to at the temp agency was very unprofessional and catty.
    She constantly criticized another employee, talking about that person’s weight problems.

    I think it’s a sad comment on the state of the economy when job seekers have to go with staffing agencies in the first place.
    I feel horrible that I was doing so well, then was terminated unceremoniously over some misunderstandings.

  10. BY sue says:

    My contract to hire came to a sudden and traumatic
    end a week ago. It was a horrible process, worse than getting laid off. My manager at the insurance company where I worked had nothing but praise for me and my work.
    He kept stating he was going to hire me, but six months came and went with no offer.t

    The time frame kept getting movedout.
    I have to say, I enjoyed everything about the job, but the stress
    Of having to stay a temp was getting to me.

    Then, suddenly, contractors were asked to work nights in addition to days. For two decades, contractors had not had to do night shift work. I am not capable of night shift work, and I had been led to believe that it was negotiable.

    so I approached my manager at the insurance company about it.

    It turned out not to be negotiable, and I was fired two days later.
    I suddenly found myself in a finger pointing exercize with everyone blaming me for nit understanding job requirements.

    its the first time I’ve been fired and it was poorly done.
    it was done in public, with coworkers looking on.
    The head of the temp agency said, with a smile that
    my manager at the insurance company wished to sever our relationship. He also defamed me to the temp agency.

    I’m still reeling from this. I think temp to hire really do everyone a diservice, especially the employee. If a problem arises, huge misunderstandings result because there is a third party in
    The middle. The employer, having access to an infinite supply of
    Employees from overseas, can terminate people without any thought at all.

    I worked hard, had done well, only to find myself in an untenable situation. I was really getting tired of working for the temp agency anyway. The person I reported to at the temp agency was very unprofessional and catty.
    She constantly criticized another employee, talking about that person’s weight problems.

    I think it’s a sad comment on the state of the economy when job seekers have to go with staffing agencies in the first place.
    I feel horrible that I was doing so well, then was terminated unceremoniously over some misunderstandings.

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