Contract-to-Hire: How to Trial an Executive Before Going Permanent

Contract-to-hire lets you work with a senior executive on a fixed engagement first, then offer them a permanent role once you have seen them do the job. You make the hiring decision on real results from your own business, with the person already in the seat.

For a C-suite role, that is a big shift in risk. A permanent executive hire is one of the most expensive decisions a growing company makes, and most of what you know about the candidate at offer stage comes from interviews and references. This guide covers how contract-to-hire works for executive roles, when it is the right route, how to set up the trial, and what it costs.

What Does Contract-to-Hire Mean for an Executive Role?

Contract-to-hire means an executive starts on a fixed contract with a shared plan to become a permanent hire if the engagement goes well. During the trial they work as a fractional executive, a few days a week, or as an interim executive, full time. Either way they own the function, sit in your leadership meetings and are measured on outcomes.

The difference from an ordinary fractional engagement is the destination. A fractional engagement can run for years with no plan to change it. A contract-to-hire engagement is set up from day one as the first stage of a permanent hire, so the scope, the scorecard and the review point are all built around one question: should this person be our next full-time executive?

It does not always start that way. Plenty of companies bring in a fractional or interim executive with no plan to hire, then realise a few months in that this is the person they want permanently. The same steps apply from that point: describe the permanent role, agree what success looks like and set a date to decide.

How Does Contract-to-Hire Work?

Most executive contract-to-hire engagements follow the same four stages:

→ You brief the role, including the permanent role you have in mind.

→ The executive starts as a fractional or interim leader and owns the function from the first week.

→ You review their work against a scorecard, usually from around three months in.

→ You offer a permanent role, extend the engagement as it is, or end it.

If you are still deciding whether the role needs to be full time at all, start with our guide on when to scale from fractional to full-time. Contract-to-hire is the route once you know the answer is probably yes.

Why Trial an Executive Before Hiring Permanently

Interviews are a weak predictor of how a senior leader will perform inside your business. They show you how someone talks about their work. A trial shows you how they make decisions with your data, your team and your constraints.

The cost of getting it wrong is high. A senior hire who turns out to be the wrong fit means lost momentum, a second search and, often, a severance cost.

The traditional route is also slow. A retained executive search typically takes 90 to 100 days to fill a role, and the fee typically runs to 30 to 35% of first-year total compensation. During those months the seat is empty, and at the end you still have only interview evidence to go on.

Contract-to-hire changes the order. The leadership work starts within weeks, and the permanent decision comes later, once you have evidence. Here is how it compares with the other ways to fill a senior role.

When Contract-to-Hire Is the Right Route

Contract-to-hire works best in a few clear situations:

→ You are hiring your first executive in a function, such as a first CFO or first head of marketing, and you are unsure exactly what the role should look like.

→ The business is changing fast, and you want to see how a leader handles your stage before you commit.

→ Your previous permanent hire in the role did not work out, and you want more certainty this time.

→ You need someone leading the function now, and a 90-day search would leave the seat empty for too long.

→ You are preparing for a raise or a sale and want a proven leader in place before you lock in a long-term package.

It is a weaker fit when the role is already well understood and you have a strong internal successor, or when the candidates you want would only accept a permanent offer from day one. Some senior executives prefer to keep a fractional portfolio, so raise the permanent option early and check it appeals to them.

How to Set Up a Contract-to-Hire Trial

A trial only produces a clear answer if it is set up to. These four steps make the difference.

Describe the permanent role before the trial starts

Write down what the permanent role would be: title, reporting line, scope, team and an indicative package. The executive needs this to decide whether they want the job, and you need it so you are testing the right thing. A trial run against a vague role tends to end in a vague decision.

Choose a trial length that fits the role

Most companies start weighing a permanent move after about three months, and six to twelve months is usually the sweet spot. That is long enough to see full planning cycles, hiring decisions and real results. Commercial roles such as a CRO often show results sooner, while a CFO may need a few quarter ends and a board cycle to show their range.

Agree a scorecard and a review date

Pick four to six outcomes that would make you confident to hire permanently, and put a first review in the diary at around three months. Good scorecards mix hard results with how the person works:

→ A measurable result in their function, such as pipeline built, close time reduced or forecast accuracy improved.

→ A plan they have written and the team is now running.

→ At least one key hire or restructure handled well.

→ How the leadership team and direct reports rate working with them.

→ Whether they raised problems early and told you things you did not want to hear.

Our guide to scoping a fractional engagement before day one covers how to write outcomes that are specific enough to judge.

Give them real authority

A trial executive who has to clear every decision with the founder cannot show you how they lead. Give them the budget, the team and the decision rights the permanent role would have. Tell the team that this is a leader, with a plan for a permanent role, so they work with them that way from the start.

Fractional or Full Time During the Trial

You can run the trial at either level, and the right choice depends on the gap you are filling.

A fractional trial, typically one to three days a week, suits a role that will grow into full time over the next year. It costs less and lets you see how the executive prioritises when their time is limited. An interim trial, full time, suits a role that is already a full-time workload, such as an interim CFO covering a departure during a raise. It shows you how the person performs at the intensity the permanent job will need.

Some companies start fractional and move to full time partway through the trial as the workload grows. That works well, provided the scorecard and review date stay the same.

Making the Conversion Decision

At the review date, go back to the scorecard. You are looking for evidence, and you are also checking that the permanent role still makes sense for the business.

Signs it is time to convert:

→ They hit most of the scorecard and the gaps have a clear explanation.

→ The team goes to them for decisions without being told to.

→ The workload has grown to need them more days than the fractional arrangement allows.

→ They want the permanent role and the package works for both sides.

Signs to pause or end the trial:

→ The results are thin and the explanations keep changing.

→ The role you need has shifted, and their strengths no longer match it.

→ They would prefer to stay fractional, and the role genuinely needs full time.

Ending a trial without converting is a good outcome when the evidence says so. You have learned what the role needs without the cost and disruption of unwinding a permanent hire. You can also keep the executive on a fractional basis if the work still fits.

What Contract-to-Hire Costs

During the trial you pay the executive's fractional or interim rate, usually as a monthly retainer. For current benchmarks by role, see the Fractionus rate index and the cost guides for the US, the UK and Australia.

If you hire the executive directly, most platforms charge a conversion fee, because they found, vetted and supported the executive you are hiring. The terms vary between platforms and often depend on the engagement, including how long it has run.

Ask any platform how its conversion fee works for your situation before you plan a permanent move. Our breakdown of how fractional platforms charge compares the main models, and the contract terms founders get wrong covers what else to check.

Compared with a retained search, you also get months of leadership work during the trial, which a search does not provide.

How Contract-to-Hire Works at Fractionus

Contract-to-hire is one of three ways to hire through Fractionus, alongside fractional and interim engagements. You brief us on the role, including the permanent role you have in mind, and we send a shortlist of vetted executives within 48 hours. Under 3% of applicants are accepted onto the platform, and for contract-to-hire briefs we look for executives who are open to a permanent move.

During the trial, Fractionus handles the contract, invoicing and payments, and you pay the rate you were quoted with no placement fee to start. If you decide to hire the executive directly, a conversion fee applies. It depends on the engagement, including how soon you make the move, so we agree it with you at that point.

If the first match is not right, The First 30 gives you 30 days with no commitment, and we find the match who is. Submit a brief to start a contract-to-hire search.

Frequently Asked Questions

What does contract-to-hire mean?

Contract-to-hire means a person starts on a fixed contract with a shared plan to become a permanent employee if it goes well. For executives, the trial usually runs as a fractional or interim engagement, so you see them deliver before you commit.

How does contract-to-hire work for executives?

You brief the role, the executive starts as a fractional or interim leader, and you review their work against a scorecard from around three months in. If it is working, you offer a permanent role. If not, you extend the engagement as it is or end it.

How long should a contract-to-hire trial last for an executive?

Most companies start considering a permanent move after about three months, and six to twelve months is usually the sweet spot. Agree a scorecard at the start and judge the engagement against it.

How does contract-to-hire compare with executive search?

A retained executive search typically costs 30 to 35% of first-year compensation and takes around three months, with the seat empty in the meantime. With contract-to-hire you pay a fractional or interim rate during the trial, get the leadership work done from the start, and pay a conversion fee only if you hire the person directly.

Will a senior executive accept a contract-to-hire role?

Many will, especially those who want to test the fit as much as you do. Some prefer to stay fractional across several clients. Describe the permanent role and an indicative package before the trial starts, and confirm the executive wants a permanent move.

Can a contract-to-hire executive work fractionally during the trial?

Yes. A fractional trial of one to three days a week suits a role that will grow into full time. A full-time interim trial suits a role that is already a full-time workload. Some companies start fractional and increase the days during the trial.

What happens if the trial does not work out?

You end the engagement at the review point, or keep the executive on a fractional basis if the work still fits. You avoid the cost and disruption of unwinding a permanent hire. At Fractionus there are no lock-in periods and no exit penalties.

Does Fractionus charge a fee to convert an executive to permanent?

There is no placement fee to start an engagement. If you hire the executive directly, a conversion fee applies. It depends on the engagement, including how soon you make the move.