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Tue Jan 02 2024

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Difference between Permanent Staffing and Contract Staffing

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In the current job market scenario, companies find it difficult to hire qualified candidates. However, staffing companies in the market can solve this problem effectively. But most companies don’t know how to choose the right staffing agency to meet their hiring needs. Continue reading further to know the difference between permanent and contract recruiting.

The need for permanent staffing companies is continuously increasing over the past few years. Every modern business organization has unique needs, objectives, and workplaces. In this case, contract recruiting and permanent staffing are the two types of companies that exist in the job market to help organizations. The responsibility of such companies is to identify and hire the best candidates based on the business’s unique needs.

Many companies in the US job market offer staffing solutions to help HR professionals and modern business owners manage and create a strong workforce. However, organizations need to choose effectively between permanent and contract recruiting. You must know the difference between these two recruitment companies to make the right decision. But before we learn about their differences, we would first understand them individually.

What Is Contract Staffing?

Contract recruiting is the practice of hiring temporary employees to fulfill short-term business requirements and needs. The employees in contract recruiting work with the company for a short period to complete a specific project. This type of staffing is also sometimes called temporary or contingent staffing as it is a temporary practice.

When companies specify that they do not want permanent employees and only employees who can work for a few weeks or months, the type of staffing is contract recruiting. Companies can attract and hire such employees themselves. They can also get help from staffing agencies. Many contract recruiting agencies can provide business enterprises with employees on a seasonal and contractual basis.

Mostly, contract staffing is popular in organizations where employers sometimes need employees with specific analytical skills. Workload fluctuation is also a good enough reason why companies choose contract recruiting as their employment method.

What Is Permanent Staffing?

When we talk about permanent staffing, it is the practice that involves hiring permanent employees to fill the vacant job positions in a company. Employees hired through permanent staffing companies work full-time with the company and get job security from the company’s side. These employees know more about the company’s work culture, environment, and long-term goals than the temporary employees.

Other than permanent hire commitment, the job package of permanent employees includes many other benefits. These benefits include many learning opportunities within the company and active participation in various employee training and development programs.

Permanent staffing is particularly popular in companies that have employee retention as their hiring goal. In this case, permanent staffing agencies can play a crucial role. They help companies hire the most suitable candidates and achieve skilled workforce stability in the long run.

What is the Difference Between Contract and Permanent Staffing Companies?

The main difference between contract and permanent staffing companies is the work duration of the employees. Permanent staffing agencies attract long-term employees. Whereas, contract recruitment agencies attract employees who can work for a fixed term. However, there are other differences too, like differences in the level of engagement with organizations and the relationship with the employers in the job market.

If we talk about contract recruiting agencies, we know that they work with companies for a limited period. It means they have limited interaction, engagement, and communication with the companies. Whereas, permanent staffing companies get more involved with the companies as they help companies hire permanent employees. Thus, we can say that permanent staffing agencies have better relationships with employers in the job market.

The way of working is usually the same in both these recruitment agencies. And the choice of which agency to choose lies in the hands of the companies. This choice depends on different factors, for example, the company’s needs, requirements, objectives, and circumstances.

The Advantages and Disadvantages of Contract Recruiting Companies:

Contract recruiting companies offer many advantages not just to the organizations but to the candidates as well. Organizations get flexible and adaptable employees who can adjust to specific company needs. And, candidates get more exposure and opportunities to learn while working in different industries and creating positive work environments. Some advantages of contract recruiting agencies are:

Manage Growing Business Needs

Businesses sometimes may require more workforce to fulfill their growing needs. In this case, relying on a contract recruiting agency is the best thing to do. These agencies can help organizations quickly adjust the size of their workforce to manage the growing business work effectively. This employment method is best for organizations that demand more employees during uncertainty periods.


Another advantage of contract recruiting agencies is the cost-effective nature of this practice. Businesses only have to pay contract agency fees and salaries to the temporary employees. Besides these two things, companies do not provide any benefits to temporary employees. This is because temporary employees do not get job security, paid leaves, health insurance, and other permanent job benefits.

Less Hiring Costs and Efforts

The employees in contract recruiting do not require any employee development training and programs. Therefore, hiring and onboarding these employees is not much of a heavy-lifting task. It saves a lot of the hiring managers’ time and effort. HR professionals can spend this time on other priority tasks.

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Hire Skilled Employees

It happens many times that companies lack employees with specialized skills. In this case, contract agencies can help companies hire full-time specialists with the right expertise to complete specific business tasks or projects. In this way, businesses get what they want even without making long-term employment commitments with employees.

However, if we talk about the drawbacks of contract recruiting, there are some. Businesses need to consider these disadvantages too before choosing a contract recruiting agency for help in hiring employees:

  • Employees hired by contract recruiting agencies are not very loyal to companies
  • Decreased sense of job security among the temporary employees
  • Lack of involvement of short-term skilled employees in the company’s long-term strategic planning
  • Limited or less engagement and communication with the employees may affect productivity at work

The Advantages and Disadvantages of Permanent Staffing Companies:

We can say that permanent staffing companies provide business organizations with stability in the long run. Businesses looking for long-term employment commitment from the employees can reach out to permanent staffing companies. In the same way, such companies are also helpful for candidates looking for long-term job positions. Some more benefits of permanent staffing are:

Sense Of Job Security

Full-time employees do not have any doubts regarding their employment duration as companies offer them permanent job positions. It motivates the employees to work dedicatedly and stay loyal to the organization. This long-term job commitment from the organization’s side ultimately results in a strong business workforce in the long run.

Strong Company Culture

When employees feel invested in a company, they learn about the company’s culture, goals, and work environment. Such employees better understand the company’s norms. Thus, they work hard and follow all the best business practices and values. As a result, the employees focus on working together to achieve business goals and objectives.

Better Relationships with Employees

Permanent employees find it easy to build meaningful relationships with their employers as they get a sense of belonging. It helps in building an exceptional employer-employee relationship. The constant engagement and collaboration between the employers and the employees can boost productivity at work.

Retain Top Talent

Companies invest a lot of time and effort in employees to make them a permanent part of the company. It includes investing in employee training and development programs during the employment period. This way, permanent staffing companies allow businesses to hire and retain talented employees worth investing time, effort, and money in.

Just like contract recruiting, permanent staffing companies also have some disadvantages. These include:

  • High employee hiring and onboarding costs
  • Reduced hiring flexibility
  • Many employment expenses like training costs, health insurance, paid leaves, etc.
  • Decreased ability of the organization to adapt to changing or growing business needs


Ultimately, both contract and permanent staffing companies have different advantages and disadvantages. Organizations only need to consider their goals and requirements before deciding which recruitment company to rely on for satisfying their hiring needs.

However, businesses should rely on contract recruitment companies for short-term project needs and seasonal workload management. Conversely, they should take help from permanent staffing companies to achieve long-term stability and a strong employee workforce.

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