Temp-to-hire conversion rate: the formula, the eligibility window and what a conversion is worth

Temp-to-hire conversion rate is the share of workers who started a temp-to-hire assignment who were hired onto the client's payroll within the agreed trial window: conversions within the window ÷ temp-to-hire starts in the cohort × 100. Count only assignments ordered as temp-to-hire, measure each start cohort after its window closes, and report early ends, declined offers and buyouts as separate lines. We found no current, original benchmark for it as of October 2026, so the comparison that matters is each client against its own history.

The temp-to-perm conversion fee page covers the clause wording, fee structures and state caps. This page covers the rate itself, a worked cohort, and what a conversion is worth to the agency once the fee is set against the hourly spread it gives up.

What is the formula?

Temp-to-hire conversion rate = workers converted within the window
                               ÷ temp-to-hire starts in the cohort × 100

Client offer rate            = workers offered a permanent job ÷ starts
Conversion acceptance rate   = conversions ÷ workers offered
Early-end rate               = assignments ended before the window closed,
                               without a conversion ÷ starts

The second and third lines split the main rate into the client's decision and the worker's. A low conversion rate caused by clients who never offer is a different problem from one caused by workers who turn the offer down.

Which decisions define the metric?

• The denominator is temp-to-hire orders only. Mark the order type on the job order, so a straight temporary assignment that happens to convert is reported separately as an unplanned conversion and does not inflate or dilute the rate.
• A start is a worker who worked at least one shift. A worker who never turned up is a fill-rate miss, not a failed conversion; see fill rate for staffing agencies.
• The window comes from the order or the clause. If the conversion clause runs on hours, such as 520 billed hours, use those hours; otherwise use the trial length the client agreed, such as 13 weeks.
• Cohort, not period. Take all starts in a quarter and wait until every window has closed. If you divide conversions in the quarter by starts in the quarter, conversions from last quarter's starts get counted against this quarter's.
• Buyouts count as conversions. Flag them as early.
• Late conversions are their own column. A worker converted after the window closed is a success, but it tells you the window or the client's process is too slow.
• Back-door hires count when you find them. A worker hired directly by the client after the assignment ended may still trigger the fee under your clause; record it with the date you learned of it.

Worked example: one branch, one quarter's starts

Invented data, to show the counting. 40 workers started temp-to-hire assignments at one branch in Q2. Every clause used a 520-hour window. Outcomes when the last window closed:

The split points at the work. Seven workers left on their own and five were still waiting for a decision at the window's end; both are conversations the account manager could have had in week four or week eight.

What is a conversion worth to the agency?

An agency earns from a temp-to-hire placement twice: margin on every hour billed during the trial, then any conversion fee. A conversion ends the hourly margin. Whether an early conversion is good business depends on how the fee falls against the margin the agency would otherwise have earned.

Example figures, invented. Pay rate $22.00, bill rate $31.90 (45% markup), so a gross spread of $9.90 an hour. Employer costs (payroll taxes, workers' compensation and similar) of 18% of pay, or $3.96, leave a margin of $5.94 an hour. Clause: $2,600 fee, reduced by $5 for every hour billed, nothing after 520 hours.

The early buyout earns $300.80 less, because the clause reduces the fee by $5 an hour while the agency gives up $5.94 of margin for each of the 320 hours it no longer bills. Put the other way, the $1,600 fee replaces about 269 hours of margin ($1,600 ÷ $5.94), but the trial still had 320 hours to run.

Two practical lessons follow. If you want to be indifferent to when a client converts, set the hourly reduction in the clause close to your margin per hour after employer costs, not your gross spread; the staffing markup guide shows the difference. And if your conversions cluster just after the fee reaches zero, clients are waiting the fee out; a gentler slope or an earlier check-in changes that behavior more than a higher fee does.

Is there a published benchmark?

Not one that matches this metric. The closest figure we found is from the American Staffing Association's staffing industry FAQ, which cites its 2014 Staffing Employee Survey: 35% of temporary and contract employees said they had been offered a permanent job by a client where they worked on assignment, and 66% of those accepted. That is a survey of workers across all assignment types, more than a decade old, so it is not a benchmark for temp-to-hire orders. We found no newer original figure as of October 2026.

How should you segment it?

• By client. Start here, because the client decides whether to offer, and the QBR is where to show the differences; see the staffing client QBR template.
• By job type and shift. If night-shift or physically demanding assignments lose workers early across several clients, the cause is the work, not the client.
• By pay gap. Compare the temporary pay rate with the client's permanent pay for the role. A permanent offer that pays less per hour than the assignment is an obvious reason to decline it.
• By recruiter and source. Workers recruited specifically for temp-to-hire convert differently from workers redeployed from a finished assignment.
• By clause type. Hours-based, declining-percentage and fee-minus-margin clauses produce different conversion timing.

What should you do when the rate is low?

1. Check the order was real. At intake, ask whether permanent headcount is approved, what the permanent pay and benefits will be, and who decides. The job order form should carry those fields. A client with no approved headcount is ordering temporary labor.
2. Book check-ins at weeks four and eight. Ask the supervisor whether the worker is on track to convert, and ask the worker whether they still want to. Five workers waiting for a decision at week 13 is a missed week-eight conversation.
3. Confirm the permanent package before the start. Benefits waiting periods, a lower hourly rate or a shift change at conversion are the first things to check when a worker declines.
4. Read the early-end reasons. Worker quits in week one point to how the job was described; performance ends point to screening.
5. Redeploy the workers who did not convert. A trial that ends without a conversion is not a lost worker; see redeployment rate.

How does it fit with the neighboring metrics?

• Fill rate measures whether the worker started; conversion rate measures what happened after.
• Redeployment rate usually excludes converted workers from its denominator; the two together account for every assignment ending.
• Conversion fee sets the revenue on each conversion; the rate sets how many there are.
• Contract-to-hire conversion checklist is the client's side of the same event: the paperwork when the worker moves onto its payroll.

How should you report it to a client?

TEMP-TO-HIRE, Q2 STARTS (all windows closed), CLIENT: [Name] (example)
Definition: conversions within 520 billed hours ÷ temp-to-hire starts.

Starts 40 · Converted 17 (42.5%) · of which buyouts 3
Offered but declined 2 (reasons: night shift at conversion; pay)
Early ends 16: worker 7 · performance 6 · business 3
No decision at window end 5 (1 converted in week 16)

Ask for next quarter: a conversion decision at week 8 for every worker,
and the permanent pay and shift confirmed on the order.

The final line is the reason to show the number at all. A rate on its own is a number to discuss; a specific request is something the client can say yes to.