Contract-To-Hire: Build Scalable and Flexible Remote Engineering Teams

The ‘remote work’ concept has become synonymous with the post-Covid era. Consequently, establishing a flexible remote engineering team is critical for an organization’s success. For this, numerous companies are adopting the contract-to-hire (C2H) method to hire remote developers or remote development teams and achieve maximum flexibility in navigating the post-pandemic economic uncertainties.

In this blog, we have discussed some of the advantages of the contract-to-hire software developers model.

When companies hire for a time-specific short-term role, along with the possibility of onboarding the professional full-time once the contract ends, it is known as a contract-to-hire. Also called ‘temp-to-hire”, this alternative hiring process allows a company to exercise flexibility by testing out a remote developer before fully committing to hire them. This ensures lower risks for the organization while they still aim to fulfill their product development goals. In the post-pandemic world, where the business landscape has been extremely challenging, this hiring model has allowed organizations to adapt and push for their goals instead of merely surviving.

A software contract job is usually like a “try before you buy,” but for both the employee and employer. In such cases, your company will offer a paid trial period, anywhere between one to three months (can extend up to a full year, based on company needs), where the developer will operate like any other employee. The key difference here is that you can let them go once the contract ends and aren’t obligated to hire them full-time. However, if it works well, you can offer a full-time role.

While it may sound uncomplimentary for the remote developer, that is hardly the case. Yes, there has been a radical escalation in the number of companies wanting to leverage the contract-to-hire process since COVID-19. But, an increasing number of employees are looking for the same too, that is, contract-based gigs. According to Monster’s recent survey, 92% of employees consider now the right time to dive into the gig economy.

• 57% of respondents said they would accept contract-to-hire jobs while working in-between full-time roles
• 52% said they would prefer long-term contracts with flexible work timings
• 39% said they would prefer short-term contracts

Hence, the gig economy has flourished to such an extent that one in five American jobs today is held by a contract-based worker. As such, there’s no shortage of software engineer contractors, and while deciding between hiring developers on a contract basis or full-time is still a critical staffing question, the former proves to be highly beneficial today.

Hiring dedicated developers through software contract jobs significantly differs from hiring developers from a particular staffing agency or recruiting freelancers. The most significant difference between freelance vs contract is that the contract developer will work under your company as other employees, following its policies and enterprise regulations. The advantage is that the remote developer won’t work for other organizations on the same side as freelancers. They will devote their time and energy to help your company achieve its goals, and you also get the added benefit of securing them for the long run through full-time employment.

Moreover, the contract hiring process is one of the best ways to evaluate how the developer integrates with your organization, assess their work quality, and decide if they’re a good fit as a full-time employee. This is usually not the case when you hire a developer from an agency or a freelancer.

Now that we are clear about the difference between freelance and contract hire, let’s look at a few of the contract-to-hire pros and cons.

Here are some of the pros and cons of direct hire and contract hire that can assist you in making the right decision when it comes to choosing the hiring model for your next hire:

In today’s market, Google is striving and being more lenient toward filling in contract-to-hire positions rather than hiring a permanent employee. At Apple, the trend remains the same, as the global tech giant continues to expand by filling in more contract-to-hire positions. What these translate to, is that the contract hiring process is more than just an alternative to quintessential hiring processes. Instead, it allows enterprises to remain competitive in today’s economic landscape and not miss out on onboarding elite talent who are increasingly opting for contract-based roles.

Here are some of the key benefits you can expect when hiring developers via software engineer contract jobs.

Contract-to-hire workers offer your organization very meaningful staffing flexibility. Once you onboard a full-time employee for just one critical project, you will still need to pay them after it’s completed. If your company handles work that goes beyond those projects that keep such developers engaged, you will end up using your salary budget inefficiently.

However, a remote contract hire developer can choose to move on to another gig once your project completes or if there’s nothing else that requires their hands-on involvement. Ultimately, this is more cost-effective and provides a flexible approach that has helped modern enterprises tackle economic hindrances and thrive in the post-covid business sphere.

Finishing a unique project requires extraordinary skills, and your enterprise may lack them within the existing workforce. In such cases, hiring full-time developers might not be precisely beneficial, as it would lead to overstaffing and higher costs.

Contract software engineers are the perfect way to build a team to finish such projects quickly. Yes, this is somewhat an extension of the above-mentioned flexible staffing approach. At the same time, skilled and experienced contract developers also help you close the skills gap on the said project.

For example, your organization is currently struggling with machine-learning models for a client’s project. All your staff needs is a developer with the required experience building and training ML models. And you can solve this through the contract hiring process. You just need to recruit a remote ML engineer with the required skills to complete the project successfully. Plus, this helps you complete the project cost-effectively.

Moreover, if you like their work and have similar projects in the pipeline, you can offer a full-time role to keep them on board and maintain the team’s efficiency for those projects.

It’s no secret that companies are uneasy about letting full-time employees go when it’s not working out. There are severance costs involved, not to mention the additional paperwork and taxes you will have to take care of. Moreover, there’s the added worry of others talking about the sudden firing of a full-time worker, which will most certainly create anxiety and hinder productivity in your workplace.

Firing full-time employees is a situation you want to avoid, and you can easily do that with software engineer contract jobs. Temp-to-hire is the best way to check if your remote developer is the right fit for your organization and entails no additional obligations. It’s more like an extended job interview, with pay, that allows you to test out the developer’s skills, utilize them for your current need, and assess if they would be a good addition for the long run.

This means you would have to bear no severance costs, taxes, or tedious paperwork. Your employees wouldn’t have to dwell in ambiguity, wondering if they’re the next to go. Plus, your hiring managers wouldn’t have to worry about firing employees. All in all, the productivity remains unhindered, and you can complete the projects; a win-win for you!

Moreover, contract hire also gives the remote developer a chance to prove themselves. You aren’t left with the data and feedback from just the interview to evaluate if the developer is the right choice.

When you hire a permanent emloyee, paying the salary is not going to be enough. you would need to avail some other non-cash benefits and perks as well that consists of retirement plans, health insurance, life insurance, paid vacation, etc. So, altogether it can be a costly affair for companies to hire permanent employees, especially if you’re on a tight budget.

In these uncertain economic times, staffing needs are changing rapidly, which makes cost savings more imperative than ever. With a contract hiring process, you can easily avoid the extra costs, as such employees typically aren’t entitled to healthcare plans, insurance, and other employee benefits until they join as full-time workers. Hence, contract-based hiring should be your go-to if you’re currently operating on a restrained budget.

One of the best parts about choosing contract software development is the number of resources you’ll save. The pool of contract developers usually includes seasoned techies with a fair share of project-working experience and who are familiar with the software development’s ins and outs. Even if you find a developer with experience, you’d still need to invest your time and energy in training and familiarizing them with the company’s processes.

Meanwhile, a remote contract developer would contribute from their first day, with a little guidance about company policies and other regulations.

Staff risk mitigation is one of the many reasons why hiring through a software contract job allows companies to tackle uncertain business times. Recruiting full-time developers continues to be risky in today’s tight job market. Your recent full-time hire might perform exceptionally well, but your organization will suffer losses if they choose to join the ‘Great Resignation.’ All your resources on recruiting, onboarding, and training the developer will go down the drain.

Moreover, this doesn’t even consider the new hires who are a poor fit for your company.

The solution? You must embark on a newer staffing process that contract hires present. Contracts reduce the staffing risk drastically, as you can simply terminate their contract if they aren’t the right fit. On the other hand, you can hire them if they perform well and enhance your current project development team. As you can see, the contract hiring process offers flexibility like never before.

Yes, the importance of contract jobs’ flexibility has to be reiterated. That’s because turbulent times require companies to adopt flexibility to thrive, not just survive. While hiring full-time employees is the norm, it can also result in over-staffed teams where you pay benefits and salaries to poorly-fit employees, which is unsurprisingly a big no-no for any firm. At the same time, you don’t want to be understaffed and invite the risk of not completing the workload.

Contract hire will allow you to avoid these two extremities by fulfilling the exact capacity that can fluctuate with project-based or seasonal needs. Plus, with a temp-to-hire, you also gain the flexibility to delay full-time hiring decisions to get your current and immediate work done. Your company gets ample headroom to build and deploy projects faster without committing to developers full-time and dealing with unfavorable consequences.

While choosing a contract to hire is undoubtedly helpful for your organization; it does come with certain flaws. Here are some disadvantages you must consider before hiring contract software engineers: -

Although experiencing a trial run is why contract jobs are beneficial, there is always the possibility of things not working out favorably. When the contract is about to end, if you don’t find the remote developer a right fit for your organization, you won’t offer a full-time role, right? Hence, a new search will begin again, which might take up your time and money.

A contract-to-hire role does offer multiple benefits to job seekers. However, they may still face the dilemma of losing their position upon contract termination or end. On their end, they have to job hunt again, so they might simply opt for a direct-hire role. This fully depends on developers’ mindset and preferences, but overall, it poses lower job and financial security. On your end, you can reassure them about your intentions during the interview and inform them that a full-time role will be available if the contract works out smoothly.

Today, no employer wants to spend extra dollars and resources to onboard developers who might be suitable for the current project, but not for the long haul. This results in the contract-to-hire model's success, which is equally beneficial for job seekers. However, this model still includes vetting rounds, and the looming risk of starting all over again does pose a problem. However, you can find an easy and worthwhile solution to these issues by heading to Turing.com. Our AI-backed revolutionary deep jobs platform eliminates hiring risks by streamlining the entire process and matches you with remote Silicon Valley-caliber developers.

Turing’s Intelligent Talent Cloud sources, vets, and rigorously tests every developer to scoop out the top-most remote talent globally. All you need to do is follow four simple steps to hire remote developers at a fraction of the cost. Once you interview a developer, Turing offers a risk-free, two-week trial period. Hence, you get the complete advantage of the contract-to-hire model and a brief free trial to test whether the developer is worth your contract.

Join 900+ Fortune 500 companies and fast-scaling startups that have trusted Turing for their engineering needs.