What's the fee if we want to hire a temp permanently instead of continuing through you?

What staffing and recruiting agencies need to publish

Conversion fees are a routine part of the staffing model, but an unpublished or surprising fee at the exact moment a client wants to hire someone poisons an otherwise successful placement.

How customers actually ask it

The same intent arrives in wording your page probably does not use. All of these mean the same thing:

  • “What's the fee if we want to hire a temp permanently instead of continuing through you?”
  • “temp to hire conversion fee”
  • “buyout fee staffing agency”
  • “converting contractor to full time employee cost”

What a complete answer contains

For staffing and recruiting agencies specifically, an answer is only complete when it covers all 5:

  1. 1

    How the conversion fee is typically calculated — flat fee versus percentage of salary

  2. 2

    Whether the fee decreases the longer the temp has already been on assignment, and by what schedule

  3. 3

    The distinction between a temp-to-hire arrangement built into the original contract versus an unplanned conversion

  4. 4

    What happens if the client hires the temp without going through the agency at all

  5. 5

    How this compares to the cost of a direct-hire search from scratch

A worked example

Illustrative — not a real business

Our standard conversion fee is typically a percentage of the position's projected first-year salary, often in the 15 to 25 percent range depending on the contract, and it usually decreases the longer the person has already been working the assignment through us — a temp who converts after three months on assignment typically carries a lower fee than one converted in the first two weeks, since we have already recovered part of our margin through the billing period. If your original contract includes a built-in temp-to-hire structure, the conversion path and fee schedule are already spelled out and often more favorable than an unplanned, ad hoc conversion. Hiring a temp directly without going through the proper conversion process, even informally, is generally a breach of the staffing agreement and can carry a higher penalty fee than the standard conversion rate, so it is worth having that conversation with us openly rather than trying to route around it. Compared to running a full direct-hire search from scratch — which carries its own fee, typically 20 to 30 percent of salary, plus weeks of sourcing time — converting someone you already know works well is usually the better economic and practical choice either way.

Which page should own it

Temp-to-hire conversion fees page

What silence costs

A client blindsided by a conversion fee, or caught bypassing it, ends the agency relationship regardless of how good the original placement was.

More questions staffing and recruiting agencies get

Related

Does your site answer this already?

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