Clients ask us this more than anything else, so here's the framework we actually use on calls. Three questions settle it.
One: does the work end? A migration, a launch, a rewrite: work with a finish line is contract work. Paying a permanent salary for an eighteen-month problem is how companies end up with layoffs that were predictable on day one. If the work is ongoing (a product that needs owning, a system that needs a person who accumulates context) that's a hire.
Two: how expensive is a mistake? A bad contractor costs you weeks; a bad permanent hire costs you a year, team morale, and a painful exit. If the role touches your core product or will manage people, weight toward direct hire and take the extra diligence time. If you're not sure the role should even exist yet, definitely don't make it permanent.
Three: how fast do you actually need someone? A contractor can realistically start inside two weeks. A thoughtful permanent search takes four to six, because the diligence is the point. Teams in a genuine hurry often run both: a contractor to stop the bleeding, a proper search behind it.
Contract-to-hire is the honest middle when questions two and three pull against each other. You see ninety days of real work before committing, and we fix the conversion terms up front so nobody renegotiates under pressure. Agree the conversion fee, the trial length, and what 'working out' means before day one; the arrangement goes wrong almost exclusively when those three are left vague.
The cost math, since everyone asks: contractors run 30–50% more per hour than the equivalent salary, and are still frequently the cheaper decision once you price a mis-hire honestly. Bring us the actual situation and we'll tell you which model we'd pick, including when the answer is 'not us.'
