Direct vs Contract Staffing: What's the Best Option for You

Author: TASC Outsourcing
Feb 20, 2022

When looking for a job or hiring, one hears of several terms used by head-hunters and staffing agencies to describe their services. For example, some agencies offer Direct Staffing Services, and others provide Contractual or Temporary Staffing Services. Unfortunately, this often leads to confusion and indecision.

  • What do these terms mean?
  • Which is the best option for your organisation
  • And how can you make the right choice?

While hiring new employees, it is essential to understand the difference between these terms and evaluate based on the requirements. To make the best decision, we must understand the advantages and disadvantages and their viability in different business modules.

Direct Staffing

It is also referred to as Direct Placement or Recruitment. The employee is hired directly by the company. The staffing agency works to find and hire qualified and suitable candidates on behalf of their clients. These hires are usually for full-time positions but can sometimes work for part-time vacancies or temporary contracts. The staffing agency handles the recruitment tasks, suitable for vetting the resumes to draw up the contracts for their clients. The new hire goes directly to the client's payroll once the offer has been accepted and all hiring formalities completed. In a direct staffing situation, the clients usually have a solid and long-standing relationship with their staffing partner. The direct staffing service provider is committed to finding the best candidate in terms of qualification, values, and a good fit for the job and the organisation.

Contract Staffing:

The new hire is not on the company's payroll. Instead, he is a contractual hire on the payroll of the contractual staffing firm. The contract staffing process is similar to the direct hiring process, except that the commitment from the client is less than it would be in direct staffing. The client can choose to retain the contractor at the end of the contract or terminate the agreement. The agreement can be for a specific task or a particular period. The term of contracts can be very short or indefinite. In most cases, the client can absorb the contractual hire into a permanent employee at any point of time during the contract.

Contract Staffing Vs. Direct Staffing:

When deciding which one is the best for an organisation, one needs to understand the advantages and disadvantages of both. In addition, it is essential to know and understand both as the staffing process for different job profiles often differs.

 

Advantages Of Direct Staffing:

  • Promotes a sense of loyalty, stability, and security: This works for the organisation and the employee. The new hires feel like a part of a unit, promoting a sense of loyalty towards the organisation. The direct staffing method is ideal for leadership roles. The hires are secure as they have a steady job, income, and growth opportunities. The organisation is safe as it has the confidentiality and loyalty required for high-profile jobs.
  • Readymade Talent Bank: Working with a direct staffing firm gives the organisation access to a readymade talent bank. As a result, filling in full-time positions becomes a relatively faster process than it would be if it attempted to do it independently. For instance, TASC, an HR Solutions specialist, provides direct staffing services in Dubai for various business modules and organisations.
  • Cost-Effective: The direct hire is on the payroll of the organisation. So, any extra mark-ups by the staffing agency are not applicable.

To sum it up, direct hiring is an excellent option if the organisation is on the lookout for qualified and talented individuals for a more extended period.

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Advantages of Contractual Staffing:

  • Time for assessment: It gives the team and the organisation time to assess the candidate without giving them a permanent job. This is highly beneficial in the IT sector. The on-the-job skills and the confidentiality factor are of utmost importance in this particular sector.
  • On-Demand Hire: The time required to hire a contractual employee is shorter than the process of direct staffing. As a result, it ensures optimum use of resources, time, money, and opportunities.
  • Cost-Effective: The contractual staff is not the company's employee and need not be added to its benefits program. They only get paid for the number of hours they work or the particular task they are hired for, making it an effective process.
  • Coping with a sudden surge: Contract staffing is preferred if the organisation is dealing with an accelerated timeline or a sudden surge in the workload. Temporary staffing is a better option for a seasonal work surge or a niche skill that is required temporarily. E.g., the hotel industry in the tourist season, an IT professional while setting up the department. Organisations like TASC in Dubai also provide these services. Temporary and IT contract staffing is very popular in business hubs like Dubai.

Easing the Process of Contract Staffing:

If, as an organisation, the core team would prefer the Contract Staffing method, here are some ways of easing the process:

  • Anticipate the requirement: Pre-empt the staffing requirement. This will give the organisation enough time to find a suitable and reputed agency to help with contractual staffing requirements. In addition, a reputable company will be better able to provide talented and qualified employees that the organisation will eventually absorb as their permanent staff.
  • Clear Timeline: Have a clear timeline for the duration of the contract. This helps the recruiting firm set clear expectations for the prospective candidates.

An organisation always stands to benefit from good hiring decisions. So, it is essential to approach and hire the services of reliable and reputed contract staffing firms.

People and their talent are the driving force of any organisation. All staffing solutions are equally good. But finding the correct staffing solution that is a perfect fit for the organisation is significant for the success of any organisation. Therefore, scouting and investing in the right talent with the help of a good staffing partner is a crucial task. The process of staffing options and decisions become more manageable if you have a good staffing partner by your side.