Temp to Hire

What temp to hire means

Temp to hire, also called temp to perm (التحويل من التوظيف المؤقت إلى الدائم), is an operational arrangement in which an organisation engages a worker for a limited first period with the intention of taking them onto its permanent establishment if they prove suited to the role.

Where the label sits in relation to the law needs settling before anything else. The word “temporary” in temp to hire is an internal description of the organisation’s intention. Temporary work in the Saudi Labor Law (نظام العمل) is a different thing: a statutory description with a separate definition and test. A rule that attaches to one cannot be carried over to the other merely because the two share a word.

Why organisations use temp to hire

• Performance in the role shows what an interview cannot. It shows how the person works with the existing team, and how they act when priorities conflict.
• The vacancy is urgent but the decision is weighty. The arrangement separates the immediate need from the long commitment, instead of postponing both.
• The role itself is new. Its description has not settled yet, so the first period is used to establish what the role actually requires.

These are management reasons, and no contractual arrangement can rest on them alone. A reason explains why the organisation chose this route; it does not decide what the route obliges the organisation to do.

What is assessed in the first period of temp to hire

The whole arrangement assumes that a judgement will be made at the end of the period. If the standard for that judgement is not written down before the period begins, the decision becomes an impression formed after the fact.

• Two or three described outputs whose achievement can be recognised without argument, rather than a list of tasks completed.
• Two or three behaviours drawn from the requirements of the role, described in terms of what can be observed rather than in terms of personal qualities.
• Two review dates within the period, because a decision taken on the last day with no earlier warning leaves the worker carrying a result they were given no chance to change.
• Who decides, who is consulted, and what happens if the two disagree.

The worker needs to know the standard on the first day. A period in which a person is measured against something they do not know produces a decision that the person who took it cannot defend if asked.

In the sources we reviewed, we found no published recommended length for the first period on which to base one. The length chosen is examined against the conversion limits in the Labor Law, worked through below, rather than against custom.

A temp to hire decision is not the fact the law acts on

This is where the arrangement carries its legal risk. A conversion memo records an internal date. What determines the type of contract, its term and the effect of renewing it is the Labor Law. Article 55 of the Labor Law governs the term of a contract and its conversion to an indefinite term, and Article 56 of the Labor Law treats every renewal period as a continuation of the original period when the worker’s rights that depend on length of service are calculated.

A worker engaged under a contract described as temporary or casual is subject to a separate rule on continuing in work, set in the Implementing Regulation (اللائحة التنفيذية). Article 1 of the Implementing Regulation, which implements Article 6 of the Labor Law, provides that where the two parties to a temporary or casual contract continue working for a period exceeding ninety days, the contract converts into a contract subject to all the provisions of the Labor Law.

The end of that rule carries a qualification that can be lost when it is summarised. Under Article 1 of the Implementing Regulation, the conversion takes place regardless of the title of the work visa on which the worker arrived, if they came from abroad, and regardless of the residence period granted under it. The title under which the worker entered does not protect the arrangement from converting, and it is no answer when the question is raised. What matters for anyone planning temp to hire is that the effect follows from what actually happened, not from a document signed afterwards.

The conversion rules, worked through renewal by renewal, have their own sources, covered in our guide to fixed term and indefinite term contracts.

Temp to hire for workers who are not Saudi nationals

Article 37 of the Labor Law requires the contract of a worker who is not Saudi to be written and to be for a fixed term. If the contract does not state a term, Article 37 of the Labor Law makes the term one year from the date on which the worker actually starts work, and if work continues after that, the contract is deemed renewed for a like period.

So Article 37 of the Labor Law requires two things, not one: the contract must be written, and it must have a fixed term. A plan for a worker who is not Saudi that treats a contract with no term as the destination of the route is a plan for something the article does not leave open. Where nothing is stated, the term is one year by the text of the article, and it runs from the day work actually begins, not from the signing of the document and not from the date of an internal memo. Renewal for a like period then follows from continuing to work, not from any decision.

The Implementing Regulation closes the remaining question. Article 12 of the Implementing Regulation, which implements Article 37 of the Labor Law, treats the contract of a worker who is not Saudi as fixed term however long its term or its renewals, and provides that in all cases it does not convert into an indefinite term contract, even if the two parties agree that it should. The first rule of Article 55 of the Labor Law is expressly made subject to Article 37 for workers who are not Saudi, so conversion to an indefinite term cannot be planned in the same way for both groups. An organisation that leaves the term unstated in the belief that it has kept its options open has in fact chosen a term of one year.

The temp to hire arithmetic under Article 55 of the Labor Law

Article 55 of the Labor Law contains two rules, not one. A planner who stops at the first may assume that conversion happens only when the term runs out and both parties carry on.

• The first rule. It provides that a fixed term contract ends when its term expires, and that if both parties continue to perform it, it becomes a contract for an indefinite term.
• The second rule. It provides that a contract containing a renewal clause renews for the agreed term. Once the contract has been renewed three consecutive times, or the original term together with the renewals reaches four years, whichever is the shorter, and the parties continue to perform it, the contract converts into one for an indefinite term.

“Whichever is the shorter” is where planning goes wrong, because the limit reached first depends on the length of the term chosen. The arithmetic shows this in three cases:

• A first term of 12 months, renewed for the same length. At the end of the third renewal the total is 12 + 12 + 12 + 12 = 48 months, which is four years. Both limits are reached at the same time.
• A first term of 18 months, renewed for the same length. After the first renewal the total is 36 months, and the second renewal takes it to 54 months. The four year mark of 48 months therefore falls within the second renewal, before a third renewal exists at all.
• A first term of 6 months, renewed for the same length. At the end of the third renewal the total is only 24 months. The limit on the number of renewals is the one reached, and the four year limit is far away.

The lesson for temp to hire is that a chain of short extensions carries no less effect than a single long term, and it may reach the limit sooner. An organisation that extends by six months at a time “until things become clear” is moving towards a limit set by a count, while believing it is moving through open ground.

What undermines temp to hire

• The open extension. A first period is followed by a second and then a third with no decision. It is postponement presented as assessment.
• Withholding onboarding on the ground that the worker may not stay. Employee onboarding is the process that carries a new hire to full productivity, so withholding it produces weak performance, which is then taken as a verdict on the person.
• Confusing it with seasonal engagement. Seasonal work is tied to a recurring season, so its end is part of its design. The end of temp to hire is a decision that has to be taken.
• Keeping the worker out of what the rest of the team has access to, with no permissions, no meetings and no information, and then measuring them against people who have all three.
• Postponing the question of cost. A route that ends in rejection returns the vacancy to its starting point months later, and that can cost more than an extra interview would have cost in the first week.

How temp to hire differs from probation, temporary or casual work, and confirming an existing employee

The confusion here is not a matter of words. Each of these answers a different question, and using the name of one in place of another can lead an organisation to rely on a rule that was not written for its situation.

• The probation period. It is a statutory arrangement at the start of an existing employment relationship, with conditions set in the Labor Law. Article 53 of the Labor Law applies probation only where the contract states it expressly and specifies its duration, caps the total at 180 days in all cases, and allows either party to end the contract during it. Article 19 of the Implementing Regulation leaves the Eid al Fitr and Eid al Adha holidays, the National Day holiday, the Founding Day holiday and sick leave out of the count, and allows probation to be split into several periods if they are consecutive and the split is stated clearly when the contract is concluded. Article 54 of the Labor Law bars placing a worker on probation more than once with the same employer, unless both parties agree in writing and the new probation is for another profession or job, or at least six months have passed since the earlier relationship with that employer ended. Temp to hire, by contrast, is a management decision about taking a worker onto the permanent establishment. The rules of probation cannot be borrowed to justify it, and a first period is not probation simply because the organisation intends to assess the worker in it.
• Temporary or casual work in its statutory sense. It describes the work itself and has a separate test. An internal intention to hire does not make work casual, and it does not prevent work from being casual, because the description follows from the nature of the work, not from the intention of the party who contracted for it. Where a worker sits in the scope of the Labor Law is covered under employment status.
• Confirming or promoting an existing employee. It concerns someone already on the establishment who moves within it. Temp to hire concerns someone not yet on the establishment whose admission to it is being considered. Confirmation is measured against the structure of jobs; temp to hire is measured against the fit between the person and the role.

How temp to hire changes from case to case

The arrangement is the same in its management description, but its legal effect differs with the person concerned and with what the contract says:

• A worker who is not a Saudi national. The term must be written. Leaving it unstated selects one year rather than leaving the question open, continuing after that year renews the contract for a like period, and under Article 12 of the Implementing Regulation the contract does not become indefinite however long the renewals run.
• A contract with a renewal clause. Both limits in Article 55 of the Labor Law apply, and the shorter is the one that counts. A contract with no renewal clause falls under the first rule of Article 55 of the Labor Law alone, so continuing to perform it after the term expires is the fact that counts.
• An engagement described as temporary or casual. The length of time the parties continue working is what creates the effect, and neither the title of the visa nor the residence period prevents it.
• A first period that passed with no written review. The decision at its end has nothing on which to base it. It rests on an impression, and the worker is then asked to explain a result whose reasons they were never told.

The written contract and its required particulars have their own sources, covered in our guide to writing and attesting the Saudi employment contract.

We found no published measurement on which to base a figure for how many workers are taken onto the permanent establishment after a temp to hire route, or for the effect of the route on whether they stay afterwards.

The provisions relied on are those of the Saudi Labor Law as published by the Ministry of Human Resources and Social Development: Article 6 (casual, seasonal and temporary workers), Article 37 (the contracts of workers who are not Saudi), Article 53 (probation and its ceiling), Article 54 (repeating probation), Article 55 (the end of a fixed term contract and its conversion) and Article 56 (renewal periods counted towards service); together with Article 1 (the conversion of temporary and casual contracts after ninety days), Article 12 (the contracts of workers who are not Saudi) and Article 19 (the probation count) of the Implementing Regulation, issued by Ministerial Decision No. 115921 of 19/8/1446H. Royal Decree M/44 of 1446H, in force since 19 February 2025, amended Articles 37 and 53 of the Labor Law. That decree did not amend Articles 6, 54 or 55 of the Labor Law.

Before a temp to hire decision is taken

Temp to hire is a management arrangement that runs on top of a legal structure it did not create. The risk it carries is that the organisation believes it is postponing a decision while the law is counting the periods. An organisation that wants the arrangement can write the standard down on the first day, write the term into the contract, and work out where the conversion limits fall before it extends again. The memo signed at the end records a decision; it does not create the position the contract had already reached before the memo was signed.

This is an explanation of the concept and of the statutory provisions cited, not legal advice.

Related terms

• Employee Onboarding
• Employment Status
• Realistic Job Preview
• Cost per Hire