Temp vs Temp-to-Hire vs Direct Hire: Which Is Right for Your Business?

Use temp staffing when you need cover for a short period, temp-to-hire when you want to try a worker before committing, and direct hire when you already know you want to fill a role permanently. Each option trades speed, cost and risk differently, and many GTA businesses use all three for different roles.

This guide compares the three models side by side, explains what each costs you in practice and gives a simple way to choose.

The three options in plain terms

• Temporary: the worker stays on the agency’s payroll for the whole assignment. You pay the agency an hourly rate and the assignment ends when you no longer need the person.
• Temp-to-hire: the worker starts as a temp. After an agreed trial period, you can hire them onto your own payroll or end the assignment.
• Direct hire (permanent placement): the agency recruits and screens, you choose, and the person joins your payroll from day one. The agency charges a placement fee for the hire.

Side-by-side comparison

• Speed. Temp is usually fastest, often a day or two for common roles. Temp-to-hire is similar. Direct hire takes longer because the search is more selective.
• Who is the employer. With temp and temp-to-hire the agency employs the worker during the assignment, and handles payroll, vacation pay and WSIB. With direct hire you are the employer from the start.
• Cost shape. Temp costs a higher hourly rate with no recruiting cost. Direct hire costs a one-off fee instead of a markup. Ask for both in writing. For how markup works, read how much staffing agencies charge employers.
• Risk. Temp-to-hire carries the least hiring risk, because you see attendance and skill on the real job. Direct hire carries the most, though a good agency screens hard and may offer a guarantee period.
• Flexibility. Temp lets you scale up and down. Direct hire does not.

When temp makes sense

• A peak season, a project or a seasonal rush
• Cover for a leave, illness or vacation
• Roles where demand changes week to week
• When you need people fast and have not yet decided how many you need

When temp-to-hire makes sense

• You plan to hire but want to see the person work first
• You have had turnover in the role and want to reduce the risk
• A role is new and you are not sure how many hours it needs

See temp-to-hire and permanent staffing for how conversion works with us.

When direct hire makes sense

• Skilled, senior or specialised roles where you need to be selective
• Roles that are clearly permanent from the start
• When you want to avoid a trial period for a candidate you are confident in

A simple way to choose

1. Is the need short and uncertain? Use temp.
2. Is the need ongoing but you want to check fit? Use temp-to-hire.
3. Is the role clearly permanent and hard to fill? Use direct hire.

Questions to ask before you agree

1. What is the hourly rate, and what does it include?
2. If I want to hire a temp, what are the terms and when do they apply?
3. What is the replacement policy if a worker does not suit us?
4. For a direct hire, what is the placement fee and the guarantee period?

Common questions

Can I convert a temp to permanent?

Yes. Agree the terms with the agency before the assignment starts, so you know what applies if you decide to hire.

Is temp-to-hire cheaper than direct hire?

It depends on how long the trial lasts and how the agency prices it. Compare the total cost over the first months, not just the hourly rate.

Who pays vacation and holiday pay for a temp?

The agency pays it as the employer. See who pays WSIB, vacation and holiday pay for temp workers.

What roles can I fill each way?

Warehouse, manufacturing, general labour, office and admin, forklift, drivers, PSWs and security can be filled all three ways. Start with warehouse staffing or office staffing.

Not sure which model fits? Tell us the role and the timeline and we will recommend one.