Pros and Cons of Direct Hire Staffing

Direct hire staffing services find permanent employees for your business. Direct hire recruiting is sometimes called headhunting or permanent placement. No matter what you call it, direct hire recruiters serve as the backbone of many industries struggling to find talent, whether construction, industrial, manufacturing, marine—or another field. Many direct hire staffing agencies also handle short-term staffing and contract-to-hire; however, the recruiting firm serves a completely different function on behalf of their client. So, what’s the difference between direct hire staffing services and other types of recruiting? What are the pros and cons of direct hire staffing agencies? 

What are Direct Hire Staffing Agencies?

Direct hire recruiters source, screen, and help hire permanent employees for their clients. These direct hires can be full-time with benefits or part-time, but they are not contract or temporary workers. Direct hires are employed by a company that contracts with direct hire staffing agencies to find these workers.  

Direct hire recruiting is very different from temporary staffing agencies that typically employ the workforce and then contract them out to companies for a short time. A direct hire employee is fully engaged by the company and not the staffing agency. During the process of direct hire recruiting, the agency handles the following: 

  • Sourcing candidates. 
  • Screening resumes. 
  • Interviewing candidates. 
  • Gathering this information and presenting the candidates to the client company. 
  • Prepping the candidates for the interviews. 
  • Scheduling and coordinating the interviews. 
  • Gathering feedback from the interviewers. 
  • Assisting the company and the candidate during the final negotiation process. 

A direct hire staffing services company typically charges the client a fee for this service, usually a percentage of the new hire’s salary. In some cases, the direct hire agency is put on a retainer, instead of or in addition to the percentage after the candidate is hired. The job candidate is charged nothing for this service. 

Direct hire is different from contract to hire. A contract-to-hire employee can start as a contract worker and then become a permanent hire. In these instances, the job candidate may even start on the payroll of the staffing agency and then become a permanent employee of the company they’re working for. Direct hire recruiting immediately puts the new hire on the payroll of the company, which is the staffing agency’s client.

If you’re considering working with a staffing firm, what are the benefits and drawbacks of choosing direct hire staffing services? 

What are the Benefits of Direct Hire Staffing?

Companies that use direct hire recruiting companies swear by them. At a time when it’s grown increasingly difficult to find talent in almost every industry, turning the entire hiring process over to direct hire recruiters can be very appealing. What are the benefits of direct hire staffing?

Direct Hire Roles are More Appealing to Candidates

Job candidates still want full-time jobs for the benefits they offer, so a direct hire role ends up being more appealing to more candidates. Many candidates won’t even consider a job without benefits because health insurance is incredibly expensive. The latest statistics show 58% of companies offer partially or fully paid health benefits today, but 83% of companies say they want to increase benefits, particularly in the area of wellness, in the future.  

The fact that benefits are so hugely appealing means that direct hire jobs will appeal to a wider candidate pool. That’s a huge benefit for employers and direct hire recruiters, making it potentially easier to find more job candidates. 

Reduce Turnover with Direct Hire Staffing

Interestingly, 51% of employees say benefits will play a significant role in their long-term retention in their present job. Direct hire staffing candidates seek out these full-time positions and are less likely to leave because of the perks they receive in these roles. Direct hire employees have more invested in the companies they work for. They may perform at a higher level and stay longer because they feel more connected to the work and the company.  

Direct hire recruiters can work with your hiring team to understand and promote the benefits you offer candidates. They can screen job candidates to understand the nice-to-have benefits over the must-haves during the recruiting process. Direct hire recruiting teams work hard to find the right fit, saving you hours of going through candidates who simply are not. 

Direct Hire Recruiters Fill Challenging Positions

Direct hire staffing services do one thing—find talent. Most focus on key areas, making them experts at finding specialized talent. For example, CTR Group staffs exclusively for marine, industrial, manufacturing, and construction, areas that are incredibly specialized. A general recruiting agency simply won’t understand many of the jobs we hire for. This expertise helps us source passive job candidates by starting conversations with fresh faces who haven’t even applied to your job yet. This increases the quality of the candidates we offer you, because let’s face it—the best job candidates are the ones that are already employed.

Now let’s look at some of the disadvantages of direct hire recruiting to see if this service is right for your business. 

What are the Disadvantages of Direct Hire Staffing?

Every yin has a yang, so direct hire recruiting simply may not be the right fit for you. There are some disadvantages of direct hire staffing. Let’s review them. 

Direct Hire Recruiting is Time Consuming

Finding full-time direct hire employees takes a lot of time. There are, literally, millions of open jobs right now and not enough talent to fill them. Finding the talent and then finding the right fit is very time consuming. That’s why direct hire recruiters are devoted to the job. If you’re trying to still use an HR team to do your direct hiring the chances are high that your time-to-fill numbers are high. That’s also why so many companies choose to work with direct hire staffing services, to double their efforts during what is a very time-consuming process. 

Direct Hire Staffing Doesn’t Offer a Trial Period

The risk goes up with every direct hire. You have a lot riding on getting that candidate perfect every time because you are bringing in a full-time employee to train them and join an existing team. Each bad hire means time and money wasted. One bad hire also can be highly disruptive to your existing permanent employees. However, direct hire recruiting doesn’t offer you a trial period or a do-over. That’s why you need to pick the right direct hire staffing services firm to ensure you find the perfect employees on the first try. 

No EOR Buffer with Direct Hire Recruitment

An employer of record (EOR) takes on the task of hiring employees and then contracts them to your business. EORs are great resources for the right situations because these companies can handle some or even all the hiring process, including payroll and benefits administration. But this isn’t the case when you select direct hire recruiting. You take on the expenses of the new hire, including onboarding, training, and benefits. There is no EOR buffer. There is no trial period. That means direct hire staffing involves risk—which is true anytime you try to hire someone new into your organization. 

Is Direct Hire Staffing Right for You?

Every situation is different. Now that you understand some of the pros and cons of direct hire staffing agencies, you need to determine your situation and whether this recruiting approach is correct for your business.  

The first question to ask yourself is a simple one: Do I have the need for full-time permanent employees? That is exactly the niche filled by direct hire recruiters. The second question is whether you have the time to find the candidates you need in a timely fashion. It’s a critical question because so many companies fail to find the talent they need quickly now. This is particularly true today when only 19% of HR leaders are prepared to address a shortage of critical talent. Finding job candidates is the number one trend impacting every company in every sector. These organizations are competing fiercely for talent and it shows; the time to hire nationally has increased by 18% from 2020 to 2021.  

The more time it takes to fill an open role, the more pressure your existing employees feel as they pick up the slack while you try to find them the help they need. It’s an environment that is also putting more pressure on HR teams who feel overburdened by the necessity of spending so much time on recruiting when in fact they also have other responsibilities to cover. The Society for Human Resource Management (SHRM) says, “Although HR professionals are aware of the need for a skilled workforce, the problem of developing a strong talent pipeline is not one that HR professionals can solve on their own.” 

That is exactly where a direct hire recruiting firm like the CTR Group can help your business.

Work with the Nation’s Top Direct Hire Staffing Agency – CTR Group

The CTR Group has been offering employers direct hire staffing services since 1987. We specialize in four key service areas: 

  • Construction 
  • Industrial 
  • Manufacturing 
  • Marine  

Our firm partners with some of the leading companies in the nation to offer a broad range of expertise with the private and federal agency sectors that we support. CTR Group offers skilled trades staffing and direct hire recruiting in Virginia and the surrounding region. If you’re ready to shorten your time-to-hire, CTR Group is standing by to help.


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