Contract-to-Hire
Contract-to-hire staffing: evaluate on the job, then convert.
Contract-to-hire lets you evaluate a professional on the job before committing to a permanent hire. The contractor starts on ApTask's payroll under one master services agreement, and you convert them when you are ready. The conversion fee steps down the longer they have worked with you and reaches zero after six months of continuous engagement.
Last updated · ApTask Editorial Team
What is contract-to-hire staffing?
Contract-to-hire is an engagement in which a worker starts as a contractor on the staffing firm’s payroll and the client may convert them to a permanent employee after an agreed period. Both sides test the fit on the real job before committing.
It is also called temp-to-perm; “contract-to-hire” is the more common term in IT and professional staffing. At ApTask it runs under Strategic Workforce Staffing, the master agreement that also covers contract and direct hire, so converting a contractor never means re-papering the supplier.
Source: ApTask is certified by the National Minority Supplier Development Council. What NMSDC MBE certification means.
How does the contract-to-hire conversion fee work?
The conversion fee is what you pay to move a contract-to-hire worker onto your own payroll. At ApTask it steps down the longer the contractor has worked with you and reaches zero after six months of continuous engagement; conversion timing is your call, not ours.
Put three things in writing before the contractor starts: how long the contract period runs before conversion is allowed, the conversion fee schedule, and the salary or pay range the worker would move to. Clear terms keep the contractor engaged during the trial, because they can see what the permanent offer looks like.
During the contract period you pay a fully-loaded hourly bill rate, as for any contract role, and ApTask publishes the underlying margin. See how staffing agencies make money for bill rate versus pay rate, and the glossary entry for conversion fee.
When is contract-to-hire the right choice?
Choose contract-to-hire when you expect a permanent need but want proof of fit first: roles where fit is hard to judge in interviews, teams with uncertain long-term headcount, and hiring managers who want to see the work before committing. If the need clearly ends on a date, use contract; if the seat is clearly permanent and the profile is clear, go straight to direct hire.
The guide contract vs contract-to-hire vs direct hire compares the three models without the commercial detail on this page.
- Need ends on a date → contract.
- Need is likely permanent, fit is uncertain → contract-to-hire.
- Need is permanent and the profile is clear → direct hire.
- You already found the person and just need compliant payroll → payrolling or pass-through.
What happens if the fit is wrong?
You can release a contract-to-hire candidate at any point in the evaluation period with no permanent commitment. Because the contractor stays on ApTask’s payroll until conversion, the engagement ends like any contract assignment, and nothing converts until you say so.
Every candidate clears identity verification, employment-history reconciliation, technical proof-of-work and reference checks before the trial starts. If a contractor leaves unexpectedly, the continuity reserve identifies a replacement candidate within 48 hours.
Who employs the worker during a contract-to-hire engagement?
Until conversion the worker is a contractor: W-2 on ApTask’s payroll with full benefits in most cases, or 1099 or corp-to-corp where the role and worker structure support it. After conversion they are your employee on your payroll, benefits and policies.
Whether a contractor is W-2, 1099 or corp-to-corp is a worker-classification question, not a preference: at the federal level the IRS applies its common-law control test (IRS: independent contractor or employee? (external source)), and state rules such as California’s AB 5 can apply as well; the glossary explains W-2 vs 1099 vs C2C. Direct ApTask engagements, including the contract period of a contract-to-hire, count as Tier 1 minority-owned spend with an NMSDC-certified MBE.
Side by side
How does contract-to-hire compare with contract and direct hire?
| Model | Trial period | Fee | Conversion | Exit |
|---|---|---|---|---|
| Contract-to-hire | The engagement itself: evaluate on the job | Hourly bill rate, then a conversion fee | Your call; the fee steps down to zero after six months | Release at any point in the evaluation period |
| Contract | None built in: fixed timeline, no obligation to hire | Hourly bill rate; margin published | Possible mid-engagement, on the same step-down schedule | Two-week no-fee replacement window |
| Direct hire | None: permanent from day one | Single recruitment fee, a percentage of base salary | Not applicable | 90-day no-fee replacement guarantee |
Terms as stated on Strategic Workforce Staffing; shortlist SLAs are 48 hours for contract and contract-to-hire and 5 business days for direct hire.
How it works
How does contract-to-hire work at ApTask?
- 01
Intake and written terms
Send the role, timeline and constraint. We agree the contract period before conversion is allowed, the conversion fee schedule and the pay range the worker would move to, in writing, before sourcing starts.
- 02
Engagement-model calibration
We confirm contract-to-hire is the right model for the seat, or recommend contract or direct hire instead. The recommendation is on the record before any candidate is presented.
- 03
Authenticated sourcing
Identity verification, employment-history reconciliation, technical proof-of-work and reference checks, the same pipeline every engagement model runs through.
- 04
Shortlist in 48 hours
Three to five candidates inside the contract SLA window, each with a scorecard. You interview and choose.
- 05
Evaluation on the job
The contractor works on your team on ApTask’s payroll, with equipment, NDA, payroll and benefits onboarding handled inside our platform. Release at any point with no permanent commitment.
- 06
Conversion when you are ready
Convert on your timeline. The conversion fee follows the agreed schedule, stepping down to zero after six months of continuous engagement, with no re-papering of the supplier.
Frequently asked questions
Is contract-to-hire the same as temp-to-perm?
Largely, yes. Both describe starting a worker on the staffing firm’s payroll with the option to convert them to the client’s permanent payroll later. “Contract-to-hire” is the more common term in IT and professional staffing.
How long is a contract-to-hire period?
There is no fixed period: you set how long the contract runs before conversion is allowed and put it in the agreement. The conversion fee steps down over time and reaches zero after six months of continuous engagement, so the schedule, not a deadline, shapes the decision.
Who pays the contractor during the trial?
ApTask does. The contractor is on our payroll, W-2 with full benefits in most cases, and you pay a fully-loaded hourly bill rate for the hours worked.
Can I convert earlier than planned?
Yes. Conversion timing is your call; the conversion fee is whatever the agreed schedule says at that point, and it reaches zero after six months of continuous engagement.
What if I decide not to hire the contractor?
You can release a contract-to-hire candidate at any point in the evaluation period with no permanent commitment. The engagement ends like any contract assignment.
Does contract-to-hire count toward supplier-diversity goals?
Yes. Direct ApTask engagements count as Tier 1 minority-owned spend; ApTask is an NMSDC-certified Minority Business Enterprise, recertified annually.
Keep exploring
The other models, and the background reading.
Strategic Workforce Staffing
One MSA for contract, contract-to-hire and direct hire, with the engagement model recommended per seat.
Defined periodContract Staffing
W-2, 1099 or corp-to-corp contractors for bounded work, with a shortlist in 48 hours.
PermanentDirect Hire
Permanent placements on your payroll from day one, with a 90-day no-fee replacement guarantee.
GuideContract vs contract-to-hire vs direct hire
The informational comparison: who employs the worker, how each is priced, when to use which.
IT hubIT Staffing Solutions
Contract, contract-to-hire and direct hire technology talent, with recruiters who know your stack.
ProofCase studies
Measured outcomes across technology, healthcare, finance, engineering and executive leadership.
Want to see the work before you commit?
Tell us the role and the fit you are unsure about. We will put the conversion terms in writing, shortlist inside 48 hours, and let you convert on your timeline.