Independent contractors and freelance workers make up a significant portion of the workforce in the United States. Benefits such as health insurance and pension costs make up nearly 30% of what a business spends on employee compensation. More and more companies are hiring non-traditional workers to keep their costs down. The goal is to keep these costs between 15 and 30% of the company?s gross income. This helps keep the company in goof financial standing. Nearly 90% of American firms make some use of independent contractors or freelancers. All of this means the importance of finding contingent workforce solutions is growing.
Hiring an independent contractor can be a tricky business for a company. There are strict rules governing who can and cannot be classified as such and the Department of Labor and Internal Revenue Service have been cracking down on companies that treat people like independent contractors when they should be treated as full time employees. Misclassification lawsuits can end up being extremely costly for the employer and has cost some people their entire business. This is one reason some businesses hire companies that handle contingent workforce solutions.
These workforce management services companies hire people who are then leased out to businesses. The businesses that contract with the contingent workforce solutions companies are responsible for training the contingent staff and direct what they do when they are onsite but these people remain employees of the workforce management firm.
Another drawback to hiring independent contractors through either a management company or directly is security. Less than half of companies that rely on contingent workers do any kind of background screening. If you are looking for contingent workforce solutions, consider taking these steps to keep your business safe and secure:
- Set a clear policy for screening all employees. You want to have the same safeguards in place for freelancers and independent contractors that you have for your staff. If you do criminal background checks on staff, you should do the same for contingent workers. The goal is not to be harder on them than your regular staff, just not easier.
- If you contract with a third party, find out what screening they do. If they do not do the checks you require for your staff, ask if they can or if you can do it yourself. They may do even more screening on people than you do. If you are going to rely on their screening policies, make sure they give you proof of what they did.
- Automation will save you money. Automate your screening program and combine the programs for your staff and contingent workers into one program. There are a number of contingent workforce solutions that include automated worker screening prgrams.
- Once you have policy in place, stick to it. Unless you make it clear to everyone that this is a program that you need to do, it will not get done. In the beginning, it will be followed but unless you enforce it, after some time passes it will be used less and less until your employees abandon it all together.
Using independent contractors and freelance workers does save your company money. It can also be a way to inject new ideas and energy into your workplace.