Temp Jobs, Temp-to-Hire, and Direct-Hire: A Guide to Recruitment Options for Job Seekers

When you’re looking for a new job, there are several options in terms of how much time you want to work. From part-time to full-time flex schedules to four-day weeks and beyond, there’s a lot to consider. And when you work with a recruiting agency, there are temporary work options to add to the list. So what exactly is a temp job, or a temp-to-hire, or the other listings you see on recruiting agency websites?

When you work with recruiters, you’ll quickly encounter a few terms that refer to the types of employment they have available. The three most common types are temp, temp-to-hire, and direct-hire. Before I explain what each of these means, it’s essential to understand why an employer would choose a certain type.

First, employers seek out staffing support to accomplish a varied range of needs that can’t be met through traditional postings, which can include both short and long-term roles. Employers have lots of different motivations and pressure, but the bottom line is that they don’t always want to commit to an ongoing, 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 as well.

So what’s the difference between these types of positions? Here’s a quick guide to understanding recruiter speak. I’ll also share some insights about why an employer might choose a certain job type, 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 changed considerably in nature since the early days of staffing agencies. The recruiting industry is slowly beginning to reflect the trends of modern work. With the growth of the gig economy and freelancing, where the roles can range from four-hour filing projects to years-long change management consulting roles, temporary 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 temp roles, and offer few longer-term jobs to their candidates. The employers who hire temp workers most often have high-volume, light industrial or manufacturing needs.

Other agencies, such as Boly:Welch, are called recruiting agencies or employment agencies. These organizations recruit workers for office or professional roles across a variety of industries and offer more varied roles, including temp, temp-to-hire, direct-hire, and executive search services.

No matter what type of agency you encounter, one common feature of a temporary role is that the staffing agency is usually the employer of record, providing payroll, unemployment and workers’ compensation insurance, as well as all other employment obligations.

For employers, temporary jobs can 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.

From an employer’s perspective, the one major downside of temporary placements is that the pool of prospective candidates is limited only to job seekers who aren’t currently working, since they typically need someone to start right away!

For job seekers, there are also a variety of benefits, such as:

• Flexibility and ability to take time off between roles to pursue other goals.
• Chance to gain experience with new skills or industries.
• Keeping a paycheck coming in the door.
• Often leads to new opportunities within the company.
• Most important, temp roles give candidates options and allow them to be selective when pursuing long-term opportunities.

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

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

A temp-to-hire role is very similar to a temp job at the beginning of the assignment; the worker usually starts on the agency’s payroll and has access only to the agency’s benefits. The key difference is there’s an expectation that your position will be converted from the agency to the employer’s payroll after a set number of hours or days. For example, your contract would state that employment would transfer from the agency to the employer in 520 hours or 90 days. In Oregon, temp-to-hire roles are still at-will employees (meaning the employer or the employee can end the relationship at any time, without stating a reason). But the intent is that the temp-to-hire worker will become a long-term employee of the company within a set amount of time.

Employers appreciate temp-to-hire roles as a way to “try before you buy.” If the candidate turns out to be a bad fit or expectations are not met, it’s easier to sever ties when the worker is not on company payroll. This hiring method may also serve to spread payments to the recruiting agency over several months, although it typically costs more in total, as the investment will include the agency’s administrative costs. Also, because folks who take temp-to-hire roles are typically not working, they can start roles more quickly.

Of course, since temp-to-hire position usually attract folks who are currently unemployed, employers are often limited by the smaller candidate pool. And in a tight labor market like Portland’s, truly talented candidates will have multiple options and might not want to wait to audition when they can get a direct-hire offer.

For job seekers looking for the right fit, 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 Get Hard-to-Find Talent

When most people talk about accepting new jobs, they are 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 on the same schedule as any other employee. While most jobs get filled directly by the employer, agencies often help place people in full-time roles as well.

Employers typically turn to agencies for help with these roles because they want access to “passive” candidates, folks who are currently employed but open to new opportunities. Or they have a hard-to-source role to fill, or they want to 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 show candidates that the company is committed to them and candidates will evaluate an offer with a similar level of obligation. Additionally, the company simply pays the agency fee when they find and hire the right person; there are no weekly temp invoices to deal with. There is also a lower risk to the company, as the agency typically offers a guarantee: if the person selected doesn’t work out, the agency finds a replacement candidate.

Candidates who don’t need the flexibility or want the insecurity of a temp role generally prefer direct-hire positions. Having a direct-hire versus a temp-to-hire offer also can change the equation when they evaluate whether to leave their current role.

However, there is no right job type for every situation. Every need must be evaluated by both the employer and the job seeker based on time, risk, costs, and much more.

In the end, market conditions may dictate the types of jobs offered through recruiting agencies. In a down economy, temp roles are an incredible way to keep both candidates and employers productive and competitive. In a tight labor market like today’s, characterized by eight years of steady economic growth and a Baby Boomer retirement exodus, we’re seeing employers offering more temp-to-hire and direct-hire jobs. Top companies are going above and beyond to impress, moving fast, and showing commitment in order to attract and retain the best candidates.