Transitioning Contract Employees to Full-Time: What Are the Steps and Formalities?

I am working with an IT firm, and we have contract employees as well. Now, after two years of tenure, we would like to take some of the contract employees onto the company payroll. Can you please guide me on the formalities that I need to conduct to transition them to the company payroll?

Offer Letter and Documentation

Do we need to provide them with an offer letter directly, similar to how we give new employees joining the organization, or do we need to create other documentation indicating that we are hiring them after evaluating their performance?

Record Maintenance

Should we also maintain a record of the contractor documents in the potential employees' files?

Please guide me on this. Thank you all in advance.

After collecting the resignations from each contractor you have decided to convert to your payroll, you can issue them a fresh offer letter. However, ensure that your contractor will receive arrears, LTA, etc., from your contracting agency.

Thank you for your response. I really appreciate it. I have a few more queries:

- Do we need to maintain their resignation and experience letters in their individual files (which will be given by the contract agency)?
- Isn't it necessary to have a certain gap between this duration? (e.g., Once they serve their notice period, given by the contract agency, can we offer them an appointment letter the very next day? Is it possible?)

Waiting for the valuable reply.

Transitioning Contract Employees to Company Payroll

Give a break in service. It is ideal. Further, personal folders are maintained in the HR department. All the documents concerning resignation and new joining formalities need to be recorded and filed away in respective folders for future reference, if any.

However, before taking any action, call the contractor and talk to him about the proposal. The contractor may not be happy on one hand, since you will be depriving him of his income. However, you should convince him that he can recruit more people for his agency by highlighting the fact that you are taking on board some of the best performers. This way, his disappointment may be slightly toned down.