Contract Role Definition: Everything You Need to Know
To understand contract role definition, you first need to understand what a contractor is.3 min read
To understand contract role definition, you first need to understand what a contractor is. Numerous employers prefer to enter into a contract to hire employees, also known as a C2H agreement, before making the decision to hire a contractor as a permanent employee.
Benefits of C2H Agreements for Employers
Entering into a contract-to-hire relationship gives an employer the opportunity to oversee and observe the contractor's work and professionalism before making them a full-time employee. When the outcome proves successful, for both the employer and the contractor, the transition to becoming part of the organization tends to move smoothly and quickly. This allows the employer to stop pursuing applicants and focus on the company's responsibilities.
Why Do C2H Agreements Often Fail?
C2H agreements can fail for a variety of reasons such as, differences in personality and career goals, poor management on the employer's end, and a failure to set clear expectations. Regardless of the reasons, open communication can often prevent and solve these differences.
Disadvantages of C2H Agreements for the Employee
- You are taking on a much greater risk than the future employer. If things do not go well, you will be faced with finding another job. Unfortunately, firing a C2H employee is a pretty simple process for the employer.
- When working on a contract-to-hire basis, you will not have benefits or much job security, and the salary rate is usually considerably lower than the salaries of full-time employees.
C2H Jobs Are Usually Temporary
Contract jobs are typically temporary positions and are normally expected to last only for a short period of time. Temporary contract jobs may last anywhere from a few weeks to a few months. Contractors are hired knowing up front that the work is temporary and will not lead to a permanent position. Employees on contract jobs are called contractors. These are different from construction and defense contracting companies, which are considered contractors as well.
For example, video game makers often begin by hiring a few full-time employees during the process of developing a new game. As the developers get close to launching the game there is a need for testers to play the games and work out any glitches or faults. Video game makers have found that hiring contract workers for a brief period of time to test the product involves a much shorter hiring process and saves money in the long run.
Another example is the security company, Levi Stadium. The company only needs a couple of full-time security guards year around. During event times there is a demand for more security guards, so the company hires the majority of its workforce on an as-needed basis.
Do C2H Jobs Benefit the Employer or the Employee?
While companies blame shifting demands and a need to hire and let go of workers more efficiently as the reason for hiring contract workers, many opponents feel that it only serves to benefit employers. Temporary employees do not receive the full benefits as full-time employees do, and they do not have job stability.
What Are the Problems With C2H Jobs?
The complexity and misinterpretation of labor and tax laws have landed various organizations in hot water for misclassifying workers. The cost and time of lawsuits have led many companies to move away from contract employees. While there are ways to hire contractors under “contract," IRS rules will determine and dictate whether the employee is classified as a contractor or a full-time employee, regardless of the contract entered, come tax season.
How Are Contract Jobs Advertised?
Contract jobs are usually advertised and applied for like other job positions. Once the company has sorted through the applications, they choose the best-qualified applicants and then make contact with them to offer them a contract job. The hiring process is less time-consuming when compared to hiring a full-time employee.
Many employers will acknowledge that flexibility in hiring workers for short-term periods allows them to respond to market needs and demands. In addition, this “try and buy” method is always appealing to employers who wish to build a highly-skilled workforce and are looking for employees that can contribute to driving their business forward.
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