• The Ultimate Guide to Contract Staffing_924.png

    The Ultimate Guide to Contract Staffing

    What is Contract Staffing?

    Contract staffing is the practice of hiring employees for a determined time specified in a contract signed by the employer and recruit. These workers are highly skilled, competent, and qualified like full-time employees. Recruiting contract workers is a great way to meet spikes in labor demand, such as seasonal work. There are three salient features of contract staffing:

    1. It is a service contract and not an employment contract: Instead of hiring candidates individually, companies enter into a business-to-business agreement with a staffing agency. The agency provides companies with options from within their talent pool.
    2. Companies don’t hire people full-time: Companies employ people for a fixed duration or work on a particular project. Usually, the term of a time-based contract is 3,6, or 12 months. If not, the contract expires when the project is finished or at the end of the specified duration.
    3. Third-party agencies: When a business outsources to a contract staffing agency, the recruits may belong to the agency itself or a vendor/supplier of the agency.

    Types of Contract Staffing

    There are several types of contract options that companies can use to hire people:

    Part-time Contract

    A part-time employee agrees to work a specific number of hours per week for an agreed-upon compensation. This form of employment is popular among school and college students. It is a great way to learn new skills and gain experience by working in your spare time.

    Fixed-term Contract

    Employers use this type of contract to hire people for a specific period or to work on a particular project. The standard terms of this contract include the scope of work, compensation details, and agreed-upon benefits. At the end of the specified duration, both parties can agree to renew or let the contract expire.

    Agency Staff

    This contract is popular in the IT industry. Employees belong to an IT staffing agency but work for a client of the agency. The IT staffing agency hires an employee on a contract basis from another agency and subcontracts them to a client.

    Zero-Hour Contract

    In this type of contract, there are no stipulations about the duration. The arrangement works like a retainer where employees are always on-call if a job requires their attention. Employees come and perform their duties, after which they are free to look for other opportunities.

    How does Contract Staffing Work?

    The components of the staffing process include

    1. Estimation of Requirement: The contract staffing agency begins by understanding your requirement. The contract staffing agency analyzes the workload with the workforce to calculate the required team and arrange the total number of staff required.
    2. Recruitment: A contracting staffing agency attracts more and more people to apply for the job. Contract staffing companies contact various placement consultants, contractors, and employment exchanges and print out advertisements in the local newspapers to search for suitable candidates for the job required. Companies can then select the most competent staff with better choices.
    3. Selection: This part of the contract staffing process includes scrutinizing the deserving candidate who fulfills the desired job requirements. The process consists of interviews, tests, group discussions, etc. The procedure’s main aim is to find the right candidate for the right job.
    4. Placement: Allocation of rank to the suitable candidate is the placement of the candidate to a company. The candidate is required to work as per the responsibilities assigned to them, maintaining harmony with the other staff of the organization.

    Functions of a Contract Staffing Company

    Contract staffing agencies work with skilled professionals to provide the perfect solution for hiring companies. These short-term contract staffing companies evaluate candidates and suggest suitable candidates who can deliver the best results to a company. The primary function of the staffing company is to find qualified staff to work and deliver contract staffing solutions per the company’s requirements. Besides supplying human resources, the staffing agency may also take care of employee payrolls, conduct training programs, the orientation of employees, etc.

    Advantages of Contract Staffing for Employees

    • Employees can control their schedules and experience greater freedom.
    • Employees can work more flexibly, depending on their routines and needs.
    • Employees can sometimes control their workload, job type, and compensation.
    • Employees can profit by gaining experience in one job or from attempting and building various other jobs daily.
    • Employees can earn more as they have contract services with various firms, and part-time employees generally make more than full-time employees.

    Advantages of Contract Staffing for Employers

    • Speed: Contract staffing agencies typically have a talent pool readily available. The interview, due diligence, and onboarding process can be cumbersome if the demand is too little or too big. Hiring skilled and experienced IT professionals on a contract basis is much quicker than finding the right candidate directly.
    • Cost: It doesn’t make sense to hire full-time resources for a short-term project. The hiring process is expensive and not viable. Employers may find it challenging to hire contractors. Working with a contract staffing agency can be cost-effective because they can offer you the best price according to competitive market rates.
    • World-class Talent: Employers no longer need to be limited by geography. A contract staffing agency will help you hire the best candidates for your project from around the globe.
    • Just-in-time: Contract staffing is excellent for employers facing a time crunch. There isn’t always enough time to find and train a new resource while a critical project remains on hold, incurring losses daily.

    Challenges with Contract Staffing


    Hiring Directors and Core Management


    Contract staffing doesn’t work well for hiring core management staff whose job is to oversee the business's daily operations. Contract staffing is not an alternative to full-time hiring but a complementary strategy. In cases of long-term or ongoing requirements, it may be cost-effective to hire an in-house resource.

    Applying Non-compete Clauses


    A non-compete provision in a contract prohibits a worker from working for another company, generally a competitor, for a set length of time in a specific geographic area. However, when the corporation doesn’t directly employ the employee through the contract, it is harder to place such conditions and enforce them. There is a possibility of misclassifying employees, which has tax implications for the company hiring the contractual employee.

    How ExpertTal Helps?

    ExpertTal is an AI-driven talent platform providing the best-in-class IT professionals and web developers. We have an ever-expanding talent pool on-demand, ready to work remotely to help you meet any challenge.

    India is a massive market for IT outsourcing because you get tremendous savings compared to outsourcing from foreign markets. We have over 500 people across India who are highly skilled web developers.

    When you reach out to us, we take the time to understand your requirements and develop a plan to serve you. We screen every candidate rigorously to verify their skills and experience. Once we find suitable candidates for you, we will help onboard the chosen employees. We provide end-to-end resource management,

    Difference Between Contract and Permanent Staffing


    Contract staffing

    Permanent staffing


    The client requires a member of staff to work with a firm on a flexible basis.

    Clients need a member of staff to work for the organization long-term. 


    Contract employees have no job-related benefits.

    Permanent employees have job-related benefits


    Contract employee assignments will be for a certain period and will cover an increase in workload, illness, or maternity/ paternity leave.

    Permanent employees have a fixed salary, vacation, and variable overtime compensation


    Salaries are paid on an hourly basis.

    Salaries are paid on a salary or monthly basis.


    When compared to permanent employees, the hiring procedure is faster.

    When compared to contract staffing, the hiring procedure takes longer.


    5 Essentials to Remember for Contract Staffing

    Review current business operations: When agencies recruit contract employees to work for the firm, the first step is to assess current business operations. When employing a temporary employee, it will be evident that employees are dealing with only an independent contractor rather than recruiting an employee.

    Create the proper job description: After contractors have a firm grasp of business processes, the following step is to develop the job description. They must clarify their connection with potential applicants at this time. Include this information in their job description so that they may identify an applicant who is on the same level as them.

    Don’t take shortcuts in the hiring process: The hiring procedure is challenging. When working with contract employees, they must approach each individual as if they were genuine candidates. Before deciding whom to hire, investigate a possible candidate’s qualifications and references. Learn about previous applicant reviews to understand with whom they are working.

    Have the right tools in place: Agencies must have the proper equipment to hire and manage remote employees effectively. Cyber insurance, a fast computer, and employee tracking and management are essential tools.

    Put everything in writing: Agencies must have an independent contractor agreement before hiring the contract staff. A formal contract should outline the connection between the firm and the employee. Everything must be in writing, and the contractor must ensure that everything is covered and nothing is left out.


    As a result, contract staffing is a non-permanent recruitment technique that involves employing individuals from their existing staff to work for their client business. It’s either a part-time job or a specific project job. Employees work for the chosen firm for a set amount of time or until their job gets completed. The employees receive compensation for the services they provide to the organization. 

    The contractual staffing company thoroughly analyzes to determine which work best suits the concerned employees’ skills. Workers have the freedom to work anywhere and gain experience in various occupations to develop the skills necessary for the organization.

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    About the Author

    Kamal Rastogi is a serial IT entrepreneur with 25 yrs plus experience. Currently his focus area is Data Science business, ERP Consulting, IT Staffing and Experttal.com (Fastest growing US based platform to hire verified / Risk Compliant Expert IT resources from talent rich countries like India, Romania, Philippines etc...directly). His firms service clients like KPMG, Deloitte, EnY, Samsung, Wipro, NCR Corporation etc in India and USA.

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