Why your first revenue hire should be contract, not full-time

There’s a new hiring strategy gaining traction among fast-growing startups when it comes to finding the right talent.

Many startups are hesitant to hire full-time employees right away.

The concern is simple: they’re not sure if a new hire will be the right fit or just become an added cost.

In today’s economic climate, companies are watching their spending closely.

They want to avoid long-term commitments that could strain their budgets, especially with the heavy investments currently going into AI.

As a result, job security is becoming less predictable. Even large companies are making tough decisions.

A recent example is Meta, which announced plans to lay off about 10% of its workforce. Employees are now facing uncertainty as they wait to see what happens next.

Because of this, more companies are shifting toward hiring on fixed-term contracts.

The idea is to test candidates first before committing to a permanent role.

Kevin O'Leary has often supported this approach, suggesting that companies can hire on contract for 60-90 days, evaluate performance, and then decide whether to make a full-time offer.

It’s a practical strategy, but there’s one part I don’t fully agree with: removing benefits entirely.

While benefits can be costly, offering at least some form of support can make a big difference. Talent doesn’t come free.

When people feel valued and supported, they’re more likely to perform at a higher level.

It becomes a win-win.

So how do you get the best out of a contract hire?

Even if someone is on a 60–90 day contract, consider offering basic health coverage for that period.

It creates a sense of security and shows that you care about their well-being.

Set up a monthly bonus tied to revenue and individual performance. This encourages people to go the extra mile.

It’s simple: if there’s no revenue impact, there’s no bonus.

Schedule regular one-on-one sessions. This helps you get the best out of the hire and also allows you to learn from them.

Document performance throughout the contract so you can make a clear decision at the end, whether to extend, convert to permanent, or part ways.

In fact, this approach works well even for internal hiring.

Starting with a contract gives you time to assess fit before making a long-term commitment.

To manage contract hiring effectively, you can also use platforms like:

… which are designed to handle contracts, payments, and compliance across different regions.

You can try this strategy in your own business and see how it works.

When done right, it can help you find and retain the right talent.

But if you only offer a basic salary without any added value or structure, it will be much harder to attract people who can truly grow your business.

That’s it for today.

Give it a try and see how it works for you.