Why Do Companies Prefer Not to Hire People on a Contract to Hire Basis?
By Jeff Altman, The Big Game Hunter
The reason they prefer not to usually falls into the category of lack of commitment on your part and money. Let me explain.
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I’m Jeff Altman, The Big Game Hunter, a coach who helps people professionally in a number of different ways. it can be involved with q job search, hiring more effectively, managing and leading, workplace related issues, a whole host ofdifferent things.
The question for today is “why do companies prefer not to hire people on a contract-to-hire basis? There are a couple of reasons for that and the first one starts off with your lack of commitment to them.
After all, you’re checking them out and, in theory, they’re checking you out. But the fact is they’d rather hire you on a permanent basis so there’s a relationship built over the course of time.
The second reason is the math of the situation– the money doesn’t work. Let me explain. If they hire a senior person for a role on a contract-to-hire basis, well, 
let’s say it’s a senior, where you’re going to be hired as an interim executive for the firm. Well, they want a number one have a hands-off relationship with you so they have to have a subcontractor relationship with you during that period of time. So they’re going check you out as an interim CEO or an interim CTO or CFO and they’ll pay you your business $200 an hour, just for the sake of argument and then they’re going to hire you onto staff at the end of some predetermined period of time.
They’re going to say, they’re gonna say to you, “Good news. We’re going to hire you! $250 and you pause for a second and go, “gee, I’m earning 400 now. why would I take 250 plus benefits insurance I get through my wife, husband, a partner. This math doesn’t work with a staff-level individual. Let’s try it at that level.
They’re paying someone 50 dollars an hour. $100 dollars a year and now they have to convert the $50 an hour person onto staff. That individual isn’t a $100,000 year person generally. Generally! I. know some of you are without question. But the problem comes down to most people who are getting 50 an hour are really staff people. They do the work; they didn’t lead people who do work.
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“Well, I would be happy to lead people.” “Yes but they don’t want to risk that you’re going to fail. So you become maybe a $70,000 a year person and, again, like the other individual, $100000 a year as a consultant seventy, seventy-five thousand on staff? You walk away.
So, the problem is at the conversion time more than anything. Oh, by the way, it’s particularly acute with that $ 75-an-hour person who wants to get the 150 but what they are is a staff person who’s doing stuff. Or the people who make one hundred fifty thousand dollars a year and thus they’re not qualified to be the $150,000 a year person.
But, fundamentally, it comes down to conversion time. There’s always a problem. There’s some hiccup where you, as the consultant, go “let me keep on on this basis for a little while longer and they don’t have budget for that. They budgeted for a full time person and that’s why they don’t want to do it.
I’m Jeff Altman. Visit my website. TheBigGameHunter.us, I’ve got a lot more there that can help you. Just go to the blog. I have it categorized in a variety of different ways. Watch what you like, read would you like, listen to what you like. There’s stuff there that’ll help you.
I also want to mention I do one on one coaching– job search, hiring, managing and leading, career development– a lot of things that I help with for professionals. you can schedule time for a free discovery call or, better yet, start coaching. I’d love to help you.
Lastly, subscribe to my channel on YouTube by clicking the icon in the lower right or the picture of me in the upper left and you can also watch me on TV.
Have a great day and take care.
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ABOUT JEFF ALTMAN, THE BIG GAME HUNTER
People hire Jeff Altman, The Big Game Hunter to provide No BS Career Advice globally because he makes many things in peoples’ career easier. Those things
can involve job search, hiring more effectively, managing and leading better, career transition, as well as advice about resolving workplace issues.
Schedule a discovery call at my website, www.TheBigGameHunter.us
He is the host of “No BS Job Search Advice Radio,” the #1 podcast in iTunes for job search with over 2600 episodes.
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Wut? In IT it’s just the opposite
I was asked the question from the employer side to explain why they might be reluctant. I actually took my experiences of why clients of mine didn’t want to do it to offer the answer.