Staffing as such has emerged as one of the most important placement or employment providers in the United States with the total number of employees in the U.S. employed through staffing firms reaching nearly to three million weekly. The year over year temporary staffing growth remains high at 8.61% and the job growth in temporary services is usually considered as a growth of the current state of employment. The Employment Trends Index or ETI witnessed an upward trend in July that now stands at 120.31, which is up from previous years 119.92 in June.

The increase in ETI is a boon for various staffing companies that project the bright future for these staffing agencies for their staffing businesses. This also reflects the importance of staffing in providing various types of staffing services such as temporary staffing, contract to hire staffing, permanent or direct hire staffing etc. However, staffing agencies need to understand the notable distinctions between contract worker placements and direct hires especially when they are providing the staffing services to the IT sector or IT companies. Placing temporary workers means dealing with someone who is willing to work and be paid on a contract basis.

In case of direct hires, the concerned staffing firm should act as an external HR department for the client company and once the worker or the candidate is hired it means that individual is now on the payrolls of the company and it ends the role of the staffing firm. To succeed in direct hire staffing, the concerned staffing agency must demonstrate that it has a thorough understanding of its client company’s requirements and the kind of workers/employees they need. In addition, the staffing firm should ensure that the candidates have skills that exceed what is necessary for the position.

In case of contract staffing, it is more typically related with lower skilled positions where a temporary replacement is needed for a short period. For majority of companies, contract staffing appears to be appealing, as these businesses are not required to shoulder the liabilities and expenses of hiring directly. With contract workers, the staffing agencies have all the legal responsibility and liability. With direct hires, the staffing firm simply acts as a negotiator or bridge to get the prospective employee or worker to the company. The direct hire staffing is beneficial to the staffing companies. However, the demerit is that placing direct hires causes the flow of revenues to be inconsistent as compared with contract placements that produce more consistent, predictable cash flow for staffing agencies.