Most of the positions in your organization may be direct hire and you might not even know it! Is that a good thing? Is that a bad thing? Read on to learn the pros and cons of direct hiring as well as some best practices to implement in your organization!

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What Is Direct Hire?

Candidates who are hired as salaried, permanent employees with company benefits without the use of a third party are direct hires. This would apply most commonly to full-time positions that are added straight into payroll and benefits and report straight to the employer. You’re cutting out the middleman here without having the candidate report to an agency, but to you. It can also mean facilitating a contract at first and then hiring the candidate the first time. Direct hire essentially means exactly what it states: directly hiring the candidate through your regular business hiring practices to become a full time, long term employee.

Should Companies Direct Hire?

As with anything new in your organization, you should weigh the pros and cons to choose the best fit for your company. Let’s review these below:

Pros of Direct Hire

  • Cut out the middleman. With a direct hire, your organization is the sole entity reviewing the candidate. There will be no third party to go through, no other organization to facilitate with. The process may feel smoother as the candidate works directly with your organization.
  • Wider candidate pool. Most candidates are looking for a direct hire role, so choosing to direct hire may make your organization more attractive to candidates. With a wider candidate pool, your likelihood of selecting the right candidate for the role is higher.
  • Promotes longevity within the organization. When a candidate is hired and fully immersed within the organization, you’re promoting a long-term employee. They feel connected and intertwined in the organization’s dealings and most candidates are looking for just that!

Cons of Direct Hire

  • Time. The time it takes to direct hire is substantially longer than other options. You’re going to spend more time reviewing candidates to look for a cultural fit as well as job fit as they will hopefully be employed with your organization for many years to come.
  • Cost. Direct hiring means the organization will take on the cost of the new hire training projects and benefits immediately within the organization, making this a more costly option.
  • Difficult to make staffing changes. When you hire directly vs. a contract or temporary position, it is more difficult to move roles and individuals within your organization. You’ve hired a candidate for a specific role, so barring any performance issues or unacceptable acts as defined by your company handbook or policies, that employee should be there to stay.

Examples of Direct Hire Positions

Now that you’ve seen what a direct hire is and some pros and cons for hiring this way, it’s time to define what specific roles are most commonly directly hired.

Management or Executive Roles

One of the most common roles that are direct hires are management and executive roles due to the nature of the jobs. You wouldn’t hire a part-time CEO to run your company because this role requires time and dedication, and essentially needs to be fully within your organization. Similarly, a manager is typically a direct hire as managers project the organization’s culture down to their employees, so you want them immersed in it also. You also want managers to stay at your organization long-term because training a new manager every six months would be exhausting. Due to these factors, management, leadership and executive level roles are great examples of direct hire positions.

Elevated Degree Roles

Candidates who have achieved a masters degree, doctorate degree or postdoctoral studies fall under direct hire roles. This is mostly due to the candidate and the nature of what they are looking for. If they’ve spent their time in education and continuing education, they will seek out a job that provides stability and longevity in an organization that pays off the years of study. Because of the time commitment required, roles requiring elevated degrees fall under direct hires.

Permanent Roles

The definition of a ‘permanent role’ seems a bit ambiguous when referring to direct hires, but it falls under the category all the same. To be more clear, it may not be your managers or your roles requiring a PhD, but the roles within your organization you wish to have the least amount of turnover. If you have a permanent customer service representative role, it can still be a direct hire. More often than not, hiring this position as a direct hire will encourage the new employee to take pride in their role and stay at the organization longer! Consider your permanent, full-time roles as direct hire positions.

Best Practices for Direct Hiring

When it comes to implementing direct hiring, there are a few best practices to consider:

Review Resumes Immediately

You may receive a vast number of applications for a direct hire role, and it may feel easier to kick the can down the road and review a few a day. Best practice here would be to review resumes for your direct hire position as quickly as possible without giving up any efficiency in the process. Candidates applying for these roles are going to be casting a wide net, so the quicker your organization is to respond, the better chance you have of landing that quality candidate.

Showcase Your Organization

Going hand in hand with reviewing resumes quickly is taking the time to showcase and spotlight your organization. When candidates are looking into organizations, they are looking at more than just the role. They are doing their own culture check to see if they would enjoy working at your organization. Do your best through the direct hiring process to showcase how they would fit your culture. Spend time highlighting your culture, benefits and any key aspects that set your organization apart during the direct hire process. Organizations that project how much they care about their organization foster that in the candidates they are looking to direct hire.

Openly Communicate About the Future

Transparency is key for direct hire candidates. Applicants for these roles are specifically looking for transparency as they apply, or they would have applied for a different type of role. Talk about the potential for growth within the organization and the role and how you will facilitate that development in the company. This will help you identify candidates who are looking to work their way up within an organization versus those who are looking for a paycheck and will leave at the first sign of a better one.

Questions You’ve Asked Us About Direct Hires

This is different for the federal government than it is in relation to the content of this article. For the government, direct hire means the candidate bypasses the typical hiring process and is hired immediately.
Direct hire staffing still refers to an employee who is a permanent, full-time, payroll added employee, but it means the candidate was found through a staffing company.
No, it does not mean bypassing an interview outside of government positions. All candidates, even direct hires, should go through the same interview process.

Shalie has over 4 years of experience working in a variety of HR positions and organizations including: working as an HR department “of one”, working with a start-up based in Europe, to working in a fully established robust USA based HR department. Shalie has experience in multiple states and countries with all aspects of the HR spectrum. She has a passion to share her knowledge and experience to benefit the HR profession!

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