70% of executives plan to hire more contract workers instead of permanent employees, and if you're reading this, your leadership probably just told you the same thing.

Welcome to the contract economy. Here's how to adjust your recruiting strategy fast.

Understand Why Leadership Is Making This Shift

Companies are moving to contract hiring for budget flexibility, reduced commitment, and cost control.

What this means for you:

Faster hiring timelines: Contractors can start quickly without long notice periods or extensive onboarding.

Different sourcing channels: Contract talent lives in different places than perm candidates—staffing agencies, freelance platforms, contractor networks.

Different selling points: You're not selling long-term career growth. You're selling interesting projects, competitive rates, and flexibility.

Understanding the "why" helps you adjust your pitch and process.

Build Relationships With Staffing Agencies Fast

If you're suddenly hiring 50% contractors, you can't do it all internally.

Find 3-5 reputable staffing agencies that specialize in your industry:

• Get referrals from other recruiters or HR leaders
• Evaluate agencies based on time-to-fill, candidate quality, and pricing
• Negotiate rates upfront (standard contract fees are 30-50% markup on hourly rate)

Build relationships with specific recruiters at these agencies, not just the company. You want a go-to person who understands your needs and can move fast.

Pro tip: Treat agency recruiters like partners, not vendors. Give them clear feedback, pay invoices on time, and they'll prioritize your reqs over other clients.

Tap Into Freelance and Contractor Platforms

Contract talent hangs out in different places than perm candidates.

Where to find contractors:

• Toptal, Upwork, Fiverr (freelance platforms for tech, creative, and business roles)
• FlexJobs, We Work Remotely (remote and flexible work job boards)
• Linkedin (search for people with "Open to contract work" or "Freelance" in their profiles)
• Industry-specific contractor networks (there are niche communities for almost every profession)

Post contract roles on these platforms and actively source candidates who explicitly market themselves as contractors.

Adjust Your Candidate Pitch

Selling a contract role is different from selling a perm role.

What perm candidates care about:

• Career growth and advancement
• Benefits and PTO
• Job security
• Company culture and long-term fit

What contract candidates care about:

• Hourly/daily rate
• Project duration and scope
• Flexibility and autonomy
• Interesting work and skill development

Adjust your messaging:

Bad (perm pitch for contract role): "We're looking for someone to join our team long-term and grow with the company."

Good (contract pitch): "We need an experienced [role] for a 6-month project with potential to extend. Competitive rate, fully remote, and you'll work directly with senior leadership on a high-impact initiative."

Highlight the project, the rate, and the flexibility—not career ladders and benefits packages.

Master Contract-to-Hire Positioning

Many companies are using contract-to-hire as a trial period. Be upfront about it.

How to position contract-to-hire:

"This starts as a 3-6 month contract with strong potential to convert to full-time based on performance and business needs. Many of our contractors have successfully transitioned to permanent roles."

What candidates want to know:

• What's the conversion rate? (If it's 10%, be honest. If it's 70%, lead with that.)
• What determines conversion? (Performance? Budget approval? Manager discretion?)
• What would the perm role compensation look like?

Don't oversell the perm conversion if it's unlikely. Candidates will resent you when it doesn't happen.

Streamline Your Contract Hiring Process

Contract hiring needs to be faster than perm hiring. Contractors are often available immediately and considering multiple opportunities.

Compress your timeline:

• Resume review to phone screen: 24-48 hours
• Phone screen to interview: 2-3 days
• Interview to offer: 1-2 days
• Offer to start date: 1-2 weeks max

If you're taking 4 weeks to make a contract hire, you're losing candidates to faster-moving companies.

Simplify interviews: Contract roles don't need 4 rounds of interviews. Skills assessment + 1-2 interviews should be enough.

Understand Contract Worker Classification Rules

Misclassifying employees as contractors is illegal and expensive.

Quick rule: If you control when, where, and how someone works, they're probably an employee, not a contractor.

Work with your legal and finance teams to ensure:

• Contracts are properly structured
• Workers are classified correctly (W-2 contractor via agency vs. 1099 independent contractor)
• Compliance with state and federal labor laws

You don't want to learn about misclassification when the Department of Labor shows up.

Build a Contractor Talent Pool

If you're hiring contractors regularly, maintain an ongoing pool.

How to build it:

• Track contractors who applied but weren't selected (they might be perfect for future projects)
• Stay in touch with contractors whose projects ended well
• Ask current contractors for referrals to their networks

When a new contract role opens, reach out to your pool first. Many contractors prefer working with companies they know.

Set Clear Expectations With Hiring Managers

Hiring managers used to perm hiring might not understand how contract hiring works differently.

Educate them:

• Contractors cost more per hour but no benefits overhead
• You can't expect long-term loyalty from someone on a 6-month contract
• The best contractors are usually juggling multiple clients—they won't be 100% dedicated to you
• Onboarding needs to be faster and more efficient

Set expectations upfront to avoid frustration later.

Negotiate Competitive Contract Rates

Contract candidates care about rate more than almost anything else.

Research market rates:

• Ask staffing agencies what they're seeing
• Check freelance platforms for similar roles
• Talk to contractors in your network about their rates

If your rates are 20% below market, you won't attract quality talent. Period.

Budget reality: A contractor making $100/hour costs roughly the same as a $130K perm employee when you factor in benefits, PTO, and overhead. Help finance understand this.

Track Different Metrics

Your recruiting metrics need to adjust for contract hiring.

Key metrics for contract hiring:

• Time-to-start: (more important than time-to-offer since contractors start quickly)
• Contract completion rate: (what % of contractors finish their contracts successfully)
• Conversion rate: (for contract-to-hire roles, what % convert to perm)
• Contractor satisfaction: (will they work with you again on future projects?)
• Cost-per-contract-hire: (including agency fees)

Don't compare contract hiring metrics directly to perm hiring metrics—they're different hiring models with different success criteria.

The Bottom Line

The shift to contract hiring is happening whether you like it or not. Your job is to adapt fast.

Build agency relationships, learn where contractors hang out, adjust your pitch, streamline your process, and educate hiring managers on how contract hiring works differently.

The recruiters who figure this out will thrive in the contract economy. The ones who resist will struggle.

Your call.