Temp-to-Hire

A staffing arrangement where a worker starts as a temporary employee with the expectation of being converted to permanent status.

Temp-to-hire (also called contract-to-hire) is a hiring model in which a worker is initially placed with a company through a staffing agency or on a fixed-term contract, with both parties understanding that strong performance during the temporary period may lead to a permanent offer. The temporary period typically lasts 60–180 days and serves as an extended, paid working interview. From the employer's perspective, it reduces the risk of a permanent hire who turns out to be a poor fit; from the worker's perspective, it provides income and a chance to demonstrate capabilities before committing to a role.

The mechanics are important. During the temp period, the worker is typically on the staffing agency's payroll — the agency handles taxes, benefits administration (if any), and workers' compensation. The employer pays the agency a markup (often 20–50% above the worker's hourly rate) to cover these costs. Upon conversion, the employer often pays the agency a conversion fee, which may be a flat rate or a percentage of the worker's annual salary (commonly 15–25%). Some agreements waive the conversion fee after a specified number of working hours, which creates an incentive to run a longer temp period.

From a career perspective, temp-to-hire roles are a legitimate path into companies that have hiring freezes on permanent headcount, are unsure of role scope, or are cautious about committing to long-term salary obligations. The downsides are real: benefits are typically limited or nonexistent during the temp period, tenure on a permanent employee career track doesn't accrue, and conversion is not guaranteed — some companies use temp-to-hire arrangements as a way to avoid permanent commitment indefinitely. Always clarify in writing: the expected conversion timeline, the criteria for conversion, and what happens if conversion doesn't occur.