Hire-to-own: designing our own way out
Half the people we place end up on the client's payroll. Here is why we wrote that into the contract instead of quietly defending against it.
Every agency has the same unspoken incentive: keep the engagement running. The longer a team stays billable, the better the year looks. It is the reason so many partnerships end badly — the client eventually realises the vendor has no reason to make itself unnecessary.
We decided to invert that. After twelve months on an engagement, any specialist on a client's team can move onto their payroll with no transfer fee. Before month twelve, a pro-rated fee applies, which exists to stop us being used as a recruitment agency rather than a delivery partner.
The obvious objection is that we are giving away our best people. In practice the opposite happens. When a client knows they can take the team, they stop hedging. They give the team real ownership, real context and real problems, and the work gets better because nobody is being managed at arm's length.
It also changes who we hire. If a specialist might end up employed by a client in a year, they have to be someone that client would actually want to hire. That is a much higher bar than 'billable', and it quietly removes the temptation to staff a project with whoever is free.
About half the people we place end up converting. We lose the margin and keep the relationship — usually as the team that builds the next thing, because the person who converted is now the internal champion who knows exactly how we work.
The honest cost: our utilisation is worse than a conventional agency's, and we carry a bench to absorb it. We think that is the price of an incentive structure the client does not have to be suspicious of.