Why permanent recruitment may not work for your business (and what will)

Consider this: When a new position opens in your company, the default instinct might be to hire a permanent employee—a full-time team member with no predetermined end date. This approach is tried and tested and offers stability and long-term growth. 

But is permanent recruitment always the best option? Not necessarily.

Depending on your business needs, hiring a contractor, outsourcing a function, or using executive search might be a better fit—whether for cost efficiency, flexibility, or access to specialised skills. 

In this article, we'll discuss the pros and cons of permanent recruitment, look at alternative options, and help you determine the right approach for your workforce strategy. 

When does permanent recruitment make sense? 

While permanent recruitment isn’t always the best choice, there are situations where it provides undeniable advantages. Hiring permanent employees could be the right strategy if you're looking for stability, long-term growth, and a strong company culture. 

Consider this hiring model if you are looking for:  

• Consistency across core business functions - Roles in operations, finance, HR, and senior leadership benefit from permanent hires, as they directly impact business continuity, compliance, and strategic direction. 
• A long-term, stable workforce - If your business is in a growth phase and needs a stable, committed workforce, permanent employees provide continuity and a foundation for scaling operations. 
• Minimal disruptions to your workforce - If your business can’t afford frequent turnover or disruptions to critical functions, a stable, long-term workforce reduces hiring uncertainty and operational risks. 
• Long-term customer and client relationships - Clients and customers value consistency. A stable workforce ensures long-term relationship-building, reducing the costs of constantly training new employees on client needs. Permanent staff are also more invested in the company’s reputation, leading to better service and higher customer satisfaction. 
• Team longevity and strong company culture - If your company prioritises collaboration, mentorship, and internal leadership development, permanent recruitment helps maintain a strong organisational culture. 
• Greater ROI on training and employee development - Investing in permanent hires reduces the need for frequent basic training, allowing you to focus resources on advanced learning and leadership development. This way, you build a more capable workforce that delivers long-term value. As employees stay and grow within your organisation, the returns on these investments compound, driving sustained business performance. 

When permanent recruitment might not be the right fit? 

While permanent hiring offers stability and long-term growth, it’s not always the best option. 

Here are the four scenarios where permanent recruitment might not be the best fit for your business:  

Your workforce needs are seasonal or fluctuating  

If your workload fluctuates throughout the year, hiring permanent employees can create unnecessary costs during slower months. A permanent hire means you're locked into year-round salaries, even when business is quiet.

A temporary or contract workforce lets you scale up when demand spikes and downsize when things slow down - giving you financial flexibility while ensuring you have the right talent when you need it. 

You want a shorter, more- cost-effective hiring process  

Even with probation periods, assessing true long-term fit can be difficult. If a permanent hire turns out to be the wrong choice, replacing them can be costly and time-consuming, especially when factoring in: 

• Notice periods 
• Contractual obligations 
• Country-specific labour laws 

Temporary contracts let you assess talent in a lower-risk environment before committing long-term. If the person proves to be a great fit, you always have the option to offer a permanent role. 

You're looking for a talent for a temporary project  

For temporary or project-based work, hiring a permanent employee doesn’t make financial sense. If a role only exists for a few months, a contract hire is the more strategic choice. 

A fixed-term contract ensures you have the right skills for the project’s duration without long-term commitments. If the project runs longer than expected, you can extend the contract or offer a permanent role if the hire exceeds expectations. 

Can I make a temporary hire permanent? 

Absolutely! If both parties are interested, you can always turn a temporary hire into a permanent one. In fact, many companies use temporary contracts as a trial period to evaluate employees for long-term fit before committing them to a permanent role. 

Some staffing companies even consider this option and charge a “conversion fee” for you to acquire a contractor into a permanent position. 

If you’re considering making a temporary hire permanent, here’s what to keep in mind: 

• Communicate early – Temporary workers often plan their next move in advance. If you wait until their contract ends to discuss a permanent offer, they may have already committed elsewhere. 
• Set expectations – If the possibility of a permanent role exists, be upfront about it. This keeps temporary employees engaged and invested in your company. 
• Use temporary contracts strategically – Some companies intentionally hire on a temp-to-perm basis, using temporary roles as an extended probation period before making a long-term decision. 

What recruitment model is right for me?  

Now that you know the pros and cons of permanent recruitment, you may realise that this model isn't for you. Before deciding on alternative recruitment models for your business, consider these factors:  

• Your budget – How much can you invest in hiring, onboarding and retaining employees? 
• Your labour needs – Do you need full-time employees, or does your workload fluctuate? 
• Project-based vs. ongoing work – Is the role for a specific project, or is it a long-term business need? 
• The positions you are hiring for – Do these positions require specialised expertise, flexibility or long-term commitment? 
• Your business's growth stage – Are you in a scaling phase, restructuring or maintaining stability.

Alternative recruitment models to consider 

Contract recruitment/Temporary hiring 

You hire workers for a predetermined period. It's the ideal model for temporary projects or companies with seasonal or fluctuating labour needs. An extension of this is the temp-to-perm hiring model, where businesses start employees on a temporary contract with the possibility of a permanent offer in the future.  

Outsourcing  

You can also partner with a third-party provider that specialises in a service that is not your organisation's core business functions. Outsourcing is widespread in areas such as:  

• Marketing and social media  
• Call centers  
• HR, accounting and payroll 
• Security and cybersecurity 
• IT and software development  

The biggest pros of outsourcing are that you can count on a trained and specialised team. It is also more cost-effective compared to hiring and training an in-house team. The downside to outsourcing is that they work with multiple clients simultaneously, therefore, alignment with your company values and culture may vary. 

Executive search  

Executive search is far more than traditional recruitment—it’s a strategic, targeted effort to attract top-tier leadership, both from active job seekers and from those who aren’t even looking.  

Through specialised market mapping and proactive outreach, search firms identify leaders who might be fully engaged in their current roles, unaware of confidential opportunities or the high demand for their skill sets. These passive candidates often prove to be strong cultural fits with the potential to drive significant impact. 

By navigating these various pools of high-performing professionals, you minimize the risk of a costly mis-hire while ensuring leadership that can foster transformation, sustain growth, and tackle emerging challenges.  

The result is an organisation equipped with resilient, visionary leadership capable of delivering measurable impact over time. 

Need help expanding your workforce? 

Finding the right talent is critical to business success, and the right approach depends on your company’s unique needs, growth plans, and industry demands. 

Speak with a specialist to find the best solution for your business.