| Over the past few years the number of people joining | | | | for success in subsequent projects. |
| the ranks of the contingent workforce - contractors, | | | | While managing the contingent workforce can be |
| temporary personnel, short-term engagement | | | | challenging, it does pose some obvious benefits. If a |
| professionals and project-based workers, has | | | | company chooses to outsource payroll and HR for |
| increased dramatically. In fact, the Advisory Council of | | | | their contingent workforce through a third party |
| the U.S. Department of Labor (DOL) estimates that | | | | employer of record, they benefit from standardization |
| contingent workers make up over 30% of the | | | | of procedures and administration. Because of the |
| workforce. Since 1990 the number of workers | | | | economies of scale reached by outsourcers, |
| employed as temporary employees alone has tripled | | | | companies experience cost savings and high service |
| from 1 million to 3 million, and is expected to quadruple | | | | levels. Additionally, because HR administration is |
| in size to 12 million over the next 10 years. | | | | handled by this third-party team of experts, contingent |
| As organizations increasingly rely on contingent | | | | workers can begin working on projects immediately |
| workers, many are finding it a challenge to manage this | | | | without getting delayed by reams of paperwork. |
| critical component of the workforce. Some specific | | | | Furthermore, many HR outsourcers offer thorough |
| challenges faced by companies include: confusion in | | | | background screening checks and security clearances |
| responsibilities between procurement, which is | | | | that are required by larger companies. |
| concerned with price and volume; and HR, which | | | | Companies also benefit by centralizing their HR |
| focuses on quality of hire. Moreover, in many | | | | administration and eliminating redundant relationships |
| organizations, individual hiring managers manage their | | | | and non-uniform pricing amongst contract workers. For |
| own contingent workforce needs, resulting in multiple, | | | | example, many larger companies have decentralized |
| redundant vendor relationships, non-uniform pricing and | | | | hiring managers that bring on contingent workers for |
| tremendous overall losses in time and money. | | | | specific projects, without knowing whether that |
| There are several steps that companies can take to | | | | employee has worked in other departments or if the |
| make the best use of contingent employees to ensure | | | | job was completed to the supervisor's satisfaction. |
| mutual satisfaction. First, the morale of the contingent | | | | Outsourcing contingent employees through a third |
| employee is greatly improved if they have access to | | | | party employer of record allows companies to have a |
| the same services as regular employees. Things as | | | | centralized database where they can see which |
| simple as being permitted to park in the same lot, get | | | | contract employees have worked for the company in |
| purchase discounts, and eat in the company cafeteria | | | | the past and how well they performed. Additionally, |
| can help make the experience for the contingent | | | | many states have laws limiting 1099 contract workers |
| employee more pleasant. Additionally, companies can | | | | to work no more than 1000 hours per year or risk |
| go a step further and open up corporate training to | | | | penalties for misclassification. By having employees |
| contingent workers, allowing them to increase their | | | | centralized through an employer of record, this risk is |
| skill-set and enriching their experience. | | | | mitigated. |
| Providing contingent employees with performance | | | | Once companies understand how to manage |
| reviews after the project is completed is another way | | | | contingent workers and provide them the same |
| to improve relationships with non-core staff. Not only | | | | respect as their core staff of regular employees, it |
| does the employee get much needed feedback to | | | | becomes apparent that the benefits of outsourcing far |
| improve, but the company also prepares the employee | | | | outweigh the risks. |