Direct Hire

Direct hire refers to recruiting an employee directly into a permanent position with the employer — as opposed to contract-to-hire (where the worker starts as a contractor and may convert later) or temporary staffing (where a staffing agency is the employer of record). From an HR cost perspective, direct hire typically involves either internal recruiting effort or an agency placement fee (15 to 25 percent of first-year salary), but delivers the employee immediately under the organization's standard terms, benefits, and culture investment. The choice between direct hire and contract-to-hire involves a trade-off: direct hire is faster and signals commitment, which improves offer acceptance rates and onboarding engagement, while contract-to-hire provides an extended performance observation window before making a permanent commitment.