ASA Central Network

  • 1.  Temp to Perm Conversion Rates

    Posted 08-02-2022 17:15
    Edited by Michela Gaviorno Taylor 08-04-2022 12:16
    We are looking at our conversion rate schedule and considering updates and changes.

    Currently, we use 4 levels based on hours worked and include a release fee at the end. We are interested to know if other ASA firms use work hours or days or another metric to define conversion time.

    Thank you

    Jason Banks CSP
    Executive Vice President and Partner
    Lloyd Staffing
    (631) 777-7600 x708
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  • 2.  RE: Temp to Perm Conversion Rates

    Posted 08-03-2022 15:59
    Jason, I am curious as to why you are "visiting ' this now.  We are having clients hire full time more than i have ever seen and I have been doing this since 1986.   We are in Charleston, SC and are experiencing heavy push back from our clients regarding conversion fee's.  Apparently most of our competitors are still letting their people go @ 550 hrs, no extra conversion fees... ​

    Janet Cappellini
    Alternative Staffing Inc.
    Charleston SC
    (843) 744-6040

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  • 3.  RE: Temp to Perm Conversion Rates

    Posted 08-04-2022 11:55

    For antitrust reasons, I avoid specific suggestions on conversion fee amounts, but here are general principles for formalizing them. 

    The only way to reliably enforce conversion fees is a written contract, signed in advance by the customer, that:

    • portrays the conversion fee as the price of a normal staffing service, not a penalty for the client's breach of the staffing contract
    • defines which employees are covered and for how long (for example, for six months or a year after client interviews or the last actual temporary work)
    • triggers the fee by direct hire, assignment from another staffing firm, independent contractor deals, agency deals, and other working relationships (not just "hire" by the customer)
    • defines the fee exactly, without reference to vague standards or other documents, like "our usual fee"
    • states the fee as a function of dollars, bill rates, or other numbers that are already of record between you and the customer (not future salary, which can be misrepresented)

    Optional features of conversion fees include:

    • conditioning any right to hire or discount from the full fee on timely payment of all past invoices
    • a fee that "shrinks" as the converted employee's past temporary service for the client increases
    • an option for the client to avoid the fee by continuing the assignment prospectively for a certain number of billed hours
    • fees that may reduce or disappear for direct hire by the customer but which never reduce for any other mode of conversion, like flipping to another staffing firm

    Most staffing firm contracts do an inadequate job of setting up this protection, probably because the firms and their sales staff want to approach the subject delicately. What usually happens is that the delicacy creates big loopholes for competitors and clients to exploit.

    George Reardon
    George Reardon, Attorney & Counselor at Law
    Houston TX
    (281) 888-6641

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