Permanent, Contract, or Project-Based Hiring: Which One to Choose?

Guide To Permanent, Contract, & Project-Based Hiring

Making a selection between permanent, contract, or project-based hiring without regretting your choice later can be next to impossible. It’s especially true for new business owners or firms accepting new projects for the first time. These various staffing types come with benefits and best use cases. Making the ideal selection will lead to higher work quality, time, and cost savings.

This article covers the meaning of permanent, contract, and project-based hiring, their pros and use cases, and how a staffing solutions provider can help.

Defining Permanent Staffing

This form of staffing is about finding long-term staff who will grow with the company and be a permanent asset.

Companies hiring permanent staff decide with much consideration and establish they have a permanent need for skilled candidates. 

These staff go through the complete hiring cycle, which includes resume screening, interviewing, skill assessments, onboarding, and possibly training if necessary. 

Although most firms have their way of sourcing these staff, many choose to do so by partnering with a permanent hiring agency.

They offer a streamlined process for hiring staff who are suitable and are processed and onboarded faster.

Pros of Permanent Staffing

Hiring staff with a long-term vision to keep them has many benefits, which is why it’s the leading staffing type.

That said, let’s cover why companies prefer it.

• Offers companies stability and the ability to build and maintain a steady workforce.
• Ensures companies can handle workloads and meet deadlines. 
• Higher retention as firms invest in long-staying staff.
• A consistent workforce has better working relations, leading to higher morale and productivity.
• Permanent staff gain more knowledge of the company, its workings, and its products/services, leading to better work.

Another benefit of these employees is they work to promote their company, a pro that contributes significantly to employer branding.

Defining Contract Staffing

Contract staffing services provide employees who work for a company for a specified time. 

They usually work according to a pre-signed contract that lasts months at most. These staff aren’t always direct employees of the company. 

These short-term staff are contracted by a staffing agency that manages them and their opportunities.

Most companies utilise this staffing practice for specialised skills to fulfil a short requirement.

Pros of Contract Staffing

Permanent and contract staffing services differ significantly. Here’s why companies choose the latter when given the two options.  

• It’s a faster hiring option, and recruiting agencies can undertake the whole process.
• Contract staff aren’t attached to high overhead costs.
• This staffing type allows firms to fill skill gaps.
• It comes with fewer hiring risks. 

Companies in industries that demand skilled staff and have short-lived projects should choose this staffing.

Defining Project-Based Hiring

As the name suggests, this staffing occurs only when a project arises. Based on the project, firms will seek to fulfil all the skill requirements with skilled employees.

Companies will look for individuals with the appropriate skills and prior experience in such projects before hiring.

The work association ends with the completion of the project, and the company no longer needs them.

Pros of Project-Based Hiring

Unlike other recruitment methods, project-based hiring leads to short working relations. Its benefits that firms should consider are:

• The staff are hired for weeks or months, leading to lower costs.
• It allows companies to provide suitable skills and candidates that perfectly match the project.
• It’s best for startups and small companies who lack the team, resources, and budget of larger companies.
• There is minimal wastage of resources, and companies can operate in smaller areas as staff change with projects.

When to Use Permanent Staffing

Permanent employees have been a staple for companies around the world. They are the best employees in the following situations:

• The firm requires a stable workforce due to the constant presence of work.
• The company is willing to invest in growing its workforce and training or upskilling them.
• A company requires a long-term commitment from its staff.
• There are strategies in place that require long-term workforce planning.       
• The company needs help in hiring and wants to hire a permanent hiring agency.

When to Use Contract Staffing

Contract staff are best for your company when:

• The company has seasonal demands and needs extra hands.
• There is a short-term requirement for stilled candidates, lasting a few months.
• Companies want to try a temp-to-permanent recruitment model.  
• A sudden skill requirement arises, which the company would not regularly need.
• Firms need to keep recruitment and overhead costs to a minimum.         

When to Use Project-Based Hiring

These are cases where this recruitment form makes the best choice for companies.

• The employee or skill requirement lasts as long as a project.
• The requirement lasts weeks to months at most.
• Each project accepted by the company comes with unique skills or staffing needs.  
• The requirement is a rare occurrence and not a constant or occasional one.

Conclusion

There is no fixed right or wrong choice, as the best decision depends on your company’s immediate needs. 

Having a step back to assess the situation is necessary before making any recruitment decisions. It allows firms to make the best decision for their company while keeping costs to a minimum.     

If companies struggle with making a decision, partnering with a staffing solutions provider can help make the right decision for you.