Expected a Direct Hire offer but turned out to be as a contractor

Question

I'm currently employed by an automotive company, full time, direct hire, full benefits. I've been here for almost a year. Previous to that I was employed by another automotive company, also as a direct hire, for almost 5 years.

I'm comfortable at my current company but one day while randomly investigating the market, I found a senior level position related to my experience at a company I've always admired. I applied directly on their website and the next day received an interview request.

When I went to my first interview, I first met with HR to get an explanation of the interview structure and was handed over some documents with the company's benefits and application forms. Then I headed to the interview and did my thing.

The interview went well and was called for a second one almost immediately. This time the group manager was there instead of HR. Apparently, the second interview went well too.

A week and a half later I received an e-mail from HR telling me that the staff was interested in hiring me, but initially through a vendor (as a contractor). At that point I was very confused because nowhere in the job description or during the interviews was there any mention of the position being under such terms. I was even asked if I would still be interested, probably being aware that this was not my expectation. Besides, all communication had been directly between me and the company and not through an intermediate. So I expressed my concerns, asked for a comparison of the vendor and company's benefits, and asked them to reconsider hiring me directly. I even said that I was willing to negotiate my salary expectations in exchange for a direct hire.

One week later HR responded to my inquiries and said that the hiring manager had decided to stick to the contract-to-hire scheme, and that depending on my performance, I could have the chance to become directly hired after a year or so. I had thought a lot about this scenario since it was first mentioned, and found it very unfair, so I ended up rejecting the offer.

My main reasons being that I consider myself with enough and proven experience in the field that they need me for and don't consider a contract-to-hire (or in other words, to be "tested") a necessary step. After all, this is for a senior level role, not entry level. I also feel that I would be going a step backwards from having a stable job to the "let's see what you've got". Of course I exposed my reasons in a more humble and polite way than here.

So, I'm trying to understand the way of thinking of the hiring manager in this case. What could be a possible factor to suddenly determine it is better to hire someone as a contractor instead of directly? If the "test the candidate" step is necessary at a senior level role, it kind of means they're not entirely convinced about my qualifications. If that's the case, why even extend an offer? I know it doesn't matter now, but do you think it's fair that the position had been first advertised to me as a direct hire, only to come up with a contractor offer in the end? Is this a common thing? And lastly, when a valuable candidate rejects this type of offer, is there even a chance that the company could counteroffer under a direct hire scheme?

Sorry for the long post, and thank you in advance for any insight you can share.

Answer 1

What could be a possible factor to suddenly determine it is better to hire someone as a contractor instead of directly?

This is not at all unusual.

Many companies, and some individuals believe this is the best way to find the best employees. Some apply this to many levels of hires - not just entry level. Don't take this personally.

Clearly this company is interested in you. It's possible that the position requirement isn't fully settled - that the need for this role isn't certain - and that's why they are choosing the contract-to-hire route.

You should ask them why. Then, you can choose your next move based on their answer.

If it were me, and I still wanted to take the chance, I'd make a counter-offer. I'd agree to the contract. But I'd want the contract to state that if I were hired full time at the end of the year, I'd get a higher salary than if I were hired directly now. The contract would indicate the higher salary level I would receive.

I would spend the year proving how valuable I was, and showing the company why they need me.

Using this tactic would depend on my assessment of the company, how much I wanted to work there, and the confidence in my abilities.

And lastly, when a valuable candidate rejects this type of offer, is there even a chance that the company could counteroffer under a direct hire scheme?

Certainly. There's always a chance. You have to decide how much of a chance exists, and if you want to take it or not.

Answer 2

They looked at their needs and their budget and changed their minds about what they were looking for. If you haven't changed your mind about what you're looking for, walk away. If you're willing to consider contracting, charge them contracting rates to make up for the loss of benefits and stability.

It really is that simple.

Answer 3

I agree with @Joe Strazzere's answer, but would like to add another viewpoint. I can speak from anecdotal experience: Often the type of offer extended is simply a matter of financial allocation and (as already mentioned) it has absolutely nothing to do with your skills and experience.

It happens, in companies that hire both employees and contractors, that departments are allocated a separate budget for each type of hire - one budget for employees and a separate budget for contractors. If they've blown through the budget for employees already, or (for a variety of reasons, often political) that chunk of budget simply can't be used for this position, it's contractors only until more employee budget is available.