The Difference Between a Contract Hire and Direct Hire

Although all jobs are important, not all types of employment are the same. This is especially true for contract hire and direct hire.

A contract hire does not directly work for a company. Instead, they are employed by a staffing agency and fill a role at a company for a set amount of time. After the contract period is up, the company may negotiate a new contract, offer the worker a full-time job, or let the worker move on to another opportunity.

Conversely, direct hire is hired by a company. Although a staffing agency matches the company with the candidate, the candidate joins the company’s payroll as soon as they are hired. The employment relationship may last for as long as either party wants.

Understanding the differences between contract hire and direct hire helps you decide which type of employment may be best for you.

Characteristics of a Contract Hire

  • A contract hire works with a company for a set time.
  • Because a contract hire is for a limited term, the hiring process often is faster than a direct hire.
  • A contract hire may receive benefits through the staffing agency, but typically not through the company they work at.
  • A contract hire lets you determine whether you like the company before deciding to pursue a full-time job offer.

Characteristics of a Direct Hire

  • A direct hire typically is a full-time position.
  • Because a direct hire is long-term, the hiring process often takes longer than a contract hire.
  • A direct hire is eligible for company benefits.
  • A direct hire means a firm commitment to long-term employment.

Why the Differences Between Contract Hire and Direct Hire Matter

Understanding how contract hire and direct hire differ lets you determine which type of employment to pursue. Your goals may include applying for one or both types of employment.

For instance, you might want to be a contract hire if you desire limited-time employment, want to try a role before committing, or would like to see what a new professional field is like. Or, you might want to be a direct hire if you desire long-term employment, believe you will enjoy the position, or are remaining in the same field.

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