Temp, Temp-to-Hire, and Direct-Hire Jobs: Decoding Your Options as a Job Seeker

When you work with recruiters, you’ll likely hear a few terms that refer to the types of roles they have available. The three most common terms are temp, temp-to-hire, and direct-hire. Before I explain what each term means, let’s take a look at why an employer would choose to hire for a certain type of role.

Employers seek out staffing support to accomplish a range of needs that can’t be met through traditional job postings, which can include both short- and long-term roles. Employers have many different motivations and pressures, but the bottom line is that they don’t always want to commit to a full-time new hire. So instead of bringing on a long-term employee for every new and changing need, employers often turn to recruiting agencies to help them find temporary or temp-to-hire employees.

So what’s the difference between these types of positions, you ask? Why might an employer choose one job type over another? Here’s a quick guide to help you cut through the recruiter lingo, so you’ll be better equipped to go after the right jobs for you.

Temp Jobs Offer Flexibility, Opportunity, but Minimal Benefits

Temporary jobs have their origins in the post-war 1940s “Kelly Girls” who worked short-term, low-wage secretarial positions. Today’s temp jobs, also referred to as contract positions, have evolved considerably since the early days of staffing agencies. With the growth of the gig economy, where roles can range from four-hour filing projects to years-long change management consulting roles, temp positions are no longer limited to secretarial and reception jobs.

Generally, the nature of temp work depends on the type of agency you work with. Some staffing agencies specialize in contract work, and offer few direct-hire jobs to candidates. Other agencies, like Boly:Welch, recruit workers for professional roles across a variety of industries and types.

With temp roles, you’ll usually find the staffing agency is the employer of record, providing payroll, and unemployment and workers’ compensation insurance, to name a few.

Employers look to temp roles to fill a variety of crucial business needs:

+ Fill in for full-time staff vacations, medical or maternity leaves, and unexpected absences
+ Provide support during seasonal surges and unexpectedly large orders or sales
+ Offer expertise in an area such as IT, accounting, marketing, or HR that isn’t currently available in the company
+ Assist with project-based work – anything from filing projects to audits
+ Help overburdened teams catch up when there isn’t room in the budget to hire a new employee

There are also several benefits for you, the job seeker:

+ Flexible scheduling and the ability to take time off between roles to pursue other goals
+ Chance to gain fresh skills or experience new industries
+ Keep a paycheck coming in the door
+ Can lead to new opportunities within the company
+ Most importantly, temp work gives you options and allows you to be selective when pursuing long-term opportunities

Of course, there are some downsides to temp roles. There’s a lack of stability, and often minimal benefits. While many agencies offer basic benefits like healthcare coverage and paid sick leave to their temp workers, you’ll rarely see work-life balance benefits such as vacation time. A good agency should also give you info about the length of assignments, so you can plan ahead and resume the search for your next role when your temp job ends.

Temp-to-Hire Jobs Are an Audition for a Full-Time Role

A temp-to-hire role is similar to a temp job in that an employee usually starts on the agency’s payroll and has access only to the agency’s benefits. The key difference is the expectation that the position will be converted from the agency to the employer’s payroll and turn into a long-term position after a set number of hours or days.

Employers look at temp-to-hire roles as a way to “try before you buy.” If expectations aren’t met, it’s easier to sever ties when an employee is not on the company payroll. In a tight labor market like Portland’s, truly talented candidates will have multiple options and might not want to ‘audition’ when they can get a direct-hire offer.

If you’re a job seeker looking for a great match, temp-to-hire roles can be a great way to try on a new position. They offer more stability and opportunity than temp roles, and you can make sure you want to work there before you leave the agency’s payroll.

Direct-Hire Roles: Agencies Help Employers Woo Hard-to-Find Talent

When most people talk about accepting new jobs, they’re talking about direct-hire roles. In a direct-hire position, candidates will begin their employment on the employer’s payroll and be eligible for employer benefits. While most jobs are filled directly by the employer, agencies often help place people in full-time roles.

Employers typically turn to agencies for help with direct-hire roles:

+ to access “passive” candidates or folks who are currently employed but open to new opportunities
+ fill a hard-to-source role
+ take advantage of an agency’s expertise, access, and long-term relationships.
+ Direct-hire roles are filled by agencies more in tight labor markets, where top talent needs to be wooed.

For the employer, opening a search for a direct-hire employee means they have the broadest available candidate pool: both working and nonworking candidates. A direct-hire opportunity shows candidates that the company is committed to them, and candidates will evaluate an offer with a similar level of obligation.

If flexibility isn’t at the top of your priority list or you don’t want the instability of a temp role, you’ll likely want to pursue direct-hire positions. Having a direct-hire versus a temp-to-hire offer can also change the equation when you’re evaluating whether you should leave your current role.

However, there is no right job type for every situation. Top companies are going above and beyond to impress, moving fast, and showing commitment in order to attract and retain the best candidates.