Boom in Contract and Contract to Hire... take advantage!
Posted By: Michael Saulnier

The New York Times reports surge in hiring of Temp Workers.

NY Times, December 21, 2009.

“Last month 52,000 temps were added, greater than the number of new workers in any other category. Not even health care and government, stalwarts through the long recession, did better.”

Capitalize on the opportunity. Learn the three key things you need to add professional contract placement to your permanent placement business. Find out how contract and contract to hire can create stable, ongoing cash-flow and help you close more permanent placements


There are three key things needed to add professional contract staffing to your permanent placement business.

·         Funding to pay your contract employees wages, taxes and insurance.

·         Business insurance: General Liability, Error and Omissions, and Worker’s Compensation

·         Back office: Collecting time sheets, administering payroll, invoicing and collections from Clients, and all the agreement documents and forms required as an employer.

Funding. A professional contractor in working in fields including: Information Technology, Software Development, Engineering, Accounting and Finance, Marketing, Human Resources, and similar fields typically earns between $30 and 120 /hr. for each hours billed to the Client.

A single contractor earning $50/hr. creates a wage liability of $2000 per week, plus employer taxes and insurance. If your Client takes up to 6 weeks to pay invoices, you could need at least $12,000 to meet your payroll needs for each contractor you place.

Business insurance. Industry Standard insurance requirements for contract placement firms include General Liability insurance, Error and Omissions insurance, and Worker’s Compensation insurance.

It takes substantial cost, time and effort to put insurance coverage in place. There are typically policy minimums that must be paid, even if you only have a single contractor. It is not uncommon for it to take 6 to 8 weeks for the insurance companies to respond to a request with a quote.

Also, insurance companies review the background of the applicants, so startup companies, and recruiters without experience in the contract staffing business, may find it difficult to get policies.

Back Office. This part of the business is the most challenging for many small independent permanent placement recruiters. Unlike their current practice of sending their clients a single invoice for each placement, the contract placement business requires the responsibility to setup and manage ongoing payroll, collections and human resources activities.

Regular invoicing and payroll responsibilities mean constant paperwork and collections… taking time away from working on making more placements.

So why does anyone go through the expense and effort to place professional contractors?

Steady, ongoing income. A single contractor earning $50/hr. with a typical 50% markup making a bill rate to the client of $75/hr., if the contractor works for just 6 months, the recruiter makes around $18,000 after employer taxes, insurance, and funding costs, about as much as a permanent placement fee.

Contract placements are easier to make. It’s like the difference between a date and a marriage. Both candidates and Clients will tend to move toward a decision faster, since the relationship is not as “serious”.

Contract to Hire placements can save a dead Permanent Placement deal. If you have a candidate that your Client likes, but doesn’t have the budget for a “direct hire overhead” or if the Client doesn’t want to pay a one-time perm fee, you can use contract to hire to save the deal. Your client can pay you a fee over time, without an upfront fee, and then convert the contractor to their employee if they choose in the future. Your competitors offer this option; don’t let them take business away from you.

Contract placements are in demand, right now. As the NY Times article pointed out, this is the time in the business cycle more and more clients are turning to contract and contract to hire solutions. Don’t delay your opportunity to take advantage of this shift in market conditions.  

How can you get started?

Find a partner. Most recruiters agree that it makes sense to them to find a partner to help them with their contract staffing business.

The ideal partner provides:

-          100% funding. No out of pocket expenses or upfront costs.

-          Advance of funds for payroll funding and advance of profits to recruiter.

-          A complete employer of record service including all the needed insurance, agreements and forms.

-          A turnkey back office with all the ongoing contract activity provided… payroll, collections, time sheets, and everything else needed to operate successfully.

-          Their experience in developing and managing professional contract placement engagements.

With a partner’s assistance, you should be able to focus on making placements with your clients.

Michael Saulnier – Recruiter Support Services.
RSS is the industry leader in providing funding, employer of record, and back office services to recruiters who place professional consultants with their clients. Learn more about their complete and affordable services at .

Mention NetworkedRecruiter for special price promotion.

Member Comments!
"High energy, great content and smart Recruiters is what I get when I connect with a 'Networked Recruiter'. The system is real, the results are powerful and our events are engaging. It's a matter of recruiters wanting to be the best at what they do, and the Networked Recruiter provides them with the tools to make it happen."
Ryan Leary (, Philidelphia, PA)
"I enjoy going to the Networked Recruiter events because itís a great time to catch up with friends and meet new people in our industry! It's helped me by networking with others and hear about their success stories and struggles. All-in-all, it's a great time to hang out!"
Javier Leon (TalentFuse, Inc. San Diego, CA)
"Since starting the Networked Recruiter Meetings last year, It's definitely building a solid relationship with the local market. We had our biggest turnout last week and I'm excited to be involved in it."
Jimmy Tam (Ryder System, Inc., Miami, FL)

Think Tank - Tips & Tricks!
Part 1 of 2: Job aggregators like SimplyHired and Indeed are a great way to get your job postings seen by thousands, but how do you make your job stand out

Meet a Member!
John De Felice
Pineville, NC United States

Credit director/manager
Finance and Accounting
I am an experienced Financial Director in Credit, Collections and Analysis. My strengths are in the areas of credit administration, policy implementation, system development and quality re-engineering

Now Open!
A Different Model for Success
Orlando, FL United States

We are an online community of women who desired to get more out of life with the flexibility to have time for leisure and most importantly, family and friends. We offer a professional, corporate-like ...

Posted on: Tuesday, April 24th

Get Networking!

There are no upcoming networking events!

Start an event in my city!


Open Splits
IT Auditor

1-3 years of relevant experience...

Posted on: 2010-06-14 15:02:33
SR. IT Auditor - Integrated

3-7 years of relevant experience...

Posted on: 2010-06-14 14:44:11
SR. Internal Auditor "High Potential"

3-7 years of relevant experience...

Posted on: 2010-06-14 13:44:04

Members! - Shoutouts



RezBuzz   VIP Desk   Staff uP   The Fordyce Letter   Talent War   Kineticom Inc.   Recruiter Support Services   A3 Resourcing Inc.   Illinois Recruiters   Rock Star Recruiting  
Home | About us | Networking | Employment | Dashboard | Advertising | FAQ | Contact Us

© 2014 Networked Recruiter All Rights Reserved.