What is the Try and Hire Model in IT?

Definition of the Try and Hire Model

Try and Hire (also known as “Temp-to-Perm” or “Contract-to-Hire”) is a flexible recruitment and employment model that combines elements of temporary or contract-based engagement — often delivered through IT staff augmentation (body leasing) — with the option for permanent employment. In this model, an IT specialist begins working for the client on a contract basis (typically for 3, 6, or 12 months), and after this trial period, if both parties are satisfied, the client can offer the specialist a permanent position.

This model has gained significant traction in the IT industry, where the cost of a bad hire can exceed 200% of an annual salary (according to SHRM data) and where cultural fit, technical skills alignment, and team dynamics are difficult to assess through traditional interviews alone.

How the Try and Hire Model Works

The process typically follows a structured sequence:

Step 1: Client Identifies the Need

The client organization recognizes a need for a specialist but wants to minimize recruitment risk. Rather than committing to a permanent hire immediately, they opt for the Try and Hire model, defining:

• Required technical skills and experience level
• Project or team context
• Desired trial period duration
• Budget parameters (contract rate vs. expected permanent salary)

Step 2: Staffing Provider Sources Candidates

The IT staffing provider (e.g., an IT staff augmentation company) leverages its talent pool to identify, screen, and present suitable candidates. This typically includes:

• Technical assessment and skill verification
• Behavioral and cultural fit evaluation
• Reference checks and background verification
• Presentation of shortlisted candidates to the client

Step 3: Contract Engagement Begins

The selected specialist starts working at the client site (or remotely) under a contract between the staffing provider and the client (staff augmentation / body leasing arrangement). The specialist is formally engaged by the staffing provider, not the client.

Step 4: Trial Period and Evaluation

During the contract period, the client evaluates the specialist across multiple dimensions:

• Technical competence — quality of work, problem-solving ability, technical depth
• Team integration — collaboration with colleagues, communication style, cultural fit
• Reliability and professionalism — meeting deadlines, attendance, work ethic
• Growth potential — learning agility, initiative, leadership qualities

Step 5: Conversion Decision

At the end of the trial period (or sometimes earlier), the client decides:

• Convert to permanent — make a full-time employment offer to the specialist
• Extend the contract — continue the contract arrangement if more evaluation time is needed
• End the engagement — if the fit is not right, end the collaboration with no long-term obligation

Step 6: Transition (if converting)

Upon conversion, the specialist transitions from the staffing provider’s contract to the client’s permanent payroll. This typically involves:

• Negotiation of permanent employment terms (salary, benefits, notice period)
• Payment of a conversion fee (buy-out fee) to the staffing provider
• Knowledge transfer and formal onboarding to the client organization

Benefits for the Client

The Try and Hire model offers substantial advantages for hiring organizations:

• Reduced hiring risk — real-world performance evaluation before permanent commitment; studies show that Try and Hire conversions have 90%+ retention rates after one year, compared to 60–70% for direct hires
• Comprehensive assessment — evaluating not just hard skills but soft skills, cultural fit, and team dynamics in a real work environment
• Faster time-to-productivity — the specialist is already productive and integrated by the time they convert to permanent
• No obligation — if the specialist is not the right fit, the client can end the engagement without the legal and financial complexities of terminating a permanent employee
• Budget flexibility — contract costs are typically treated as operational expenses rather than headcount
• Access to passive candidates — many top specialists prefer contract work initially, making them accessible through Try and Hire but unreachable through direct recruitment

ROI Comparison

Scenario	Cost of Bad Hire	Try and Hire Cost
Junior developer	~$30,000–50,000	Conversion fee 10–20% of annual salary
Senior developer	~$80,000–150,000	Conversion fee 15–25% of annual salary
Technical lead	~$120,000–250,000	Conversion fee 15–25% of annual salary

The conversion fee is typically lower than traditional recruitment fees, and the risk of a bad hire is dramatically reduced.

Benefits for the IT Specialist

• Real-world evaluation — opportunity to experience the company culture, team dynamics, and actual work before making a permanent commitment
• Reduced career risk — no need to resign from current employment until confident the new organization is a good fit
• Negotiating leverage — proven performance during the trial period strengthens the specialist’s position when negotiating permanent terms
• Smooth transition — already familiar with projects, colleagues, and processes by the time of conversion
• Exploration opportunity — particularly valuable for specialists considering a career pivot or new technology stack

The Role of the Staffing Provider

The IT staffing provider plays a critical role throughout the Try and Hire process:

• Talent sourcing and screening — leveraging their network and database to identify qualified candidates quickly
• Formal employment during trial — the specialist is employed by or contracted with the provider, handling all administrative, payroll, and tax matters
• Mediation — facilitating communication between client and specialist, resolving any issues during the trial period
• Conversion negotiation — assisting with the transition terms, including the conversion fee and timeline
• Risk absorption — if the specialist leaves during the trial period, the provider typically offers a replacement at no additional cost

Typical Conversion Fee Structure

The buy-out fee compensates the staffing provider for their investment in sourcing, screening, and managing the specialist. Common structures include:

• Percentage of annual salary — typically 10–25%, decreasing as the trial period lengthens
• Sliding scale — higher fee for early conversion (e.g., month 1–3), lower for later (e.g., month 6–12)
• Flat fee — predetermined fixed amount regardless of timing
• Fee waiver — some providers waive the fee entirely if the contract duration meets a minimum threshold (e.g., 12+ months)

When to Consider Try and Hire

The Try and Hire model is particularly valuable in the following scenarios:

• Hard-to-fill positions — roles requiring rare skill combinations that are difficult to assess through interviews
• Senior and leadership roles — where cultural fit and leadership style are as important as technical skills
• New team formation — building a team from scratch, where dynamics and compatibility are crucial
• Post-merger integration — when companies need to evaluate inherited or new talent
• Budget constraints — when organizations cannot afford the risk of a failed permanent hire
• Competitive talent markets — where top candidates are more open to contract-first arrangements

Try and Hire vs. Other Models

Aspect	Try and Hire	Direct Hire	Pure Staff Augmentation
Initial commitment	Low (contract)	High (permanent)	Low (contract)
Hiring risk	Very low	High	N/A (no permanent hire)
Time to start	Fast (days/weeks)	Slow (weeks/months)	Fast (days/weeks)
Cost structure	Contract rate + conversion fee	Recruitment fee upfront	Contract rate only
Long-term retention	Very high (90%+)	Moderate (60–70%)	Low (project-based)
Assessment quality	High (real work)	Moderate (interviews only)	N/A

Legal Considerations

Several legal aspects require attention in Try and Hire arrangements:

• Contract clarity — the Try and Hire option should be explicitly stated in the agreement between the client and staffing provider, including conversion terms and fees
• Non-compete clauses — ensure that any non-compete restrictions in the specialist’s contract with the provider do not conflict with the permanent employment
• Employment law compliance — the transition from contract to permanent must comply with local labor laws regarding benefits, notice periods, and continuity of service
• IP rights — clarify intellectual property ownership during both the contract and permanent phases
• Data protection — handling of personal data during the evaluation process must comply with GDPR and local privacy regulations

Best Practices for a Successful Try and Hire

For the client

• Define clear evaluation criteria before the trial period begins
• Provide meaningful work that genuinely tests the specialist’s capabilities
• Integrate the contractor into the team — treat them as a team member, not an outsider
• Give regular feedback throughout the trial period
• Make the conversion decision promptly — do not unnecessarily delay

For the specialist

• Treat the trial period as a two-way evaluation — assess the company as they assess you
• Be proactive in demonstrating value and cultural fit
• Communicate openly about expectations and concerns
• Negotiate permanent terms based on demonstrated performance

For the staffing provider

• Be transparent about conversion terms from the outset
• Maintain regular check-ins with both client and specialist during the trial
• Facilitate a smooth handover when conversion occurs
• Offer replacement guarantees if the specialist leaves during the trial

Summary

The Try and Hire model represents one of the most effective approaches to IT recruitment, combining the speed and flexibility of staff augmentation with the long-term value of permanent hiring. By allowing both parties to evaluate the fit through real work collaboration, it dramatically reduces the risk of costly mis-hires while providing access to top talent that might not be available through traditional recruitment channels. For organizations building IT teams, particularly in competitive talent markets, Try and Hire offers a pragmatic path to securing the right people with confidence.