Keeping up with regulations while managing the oh-so intricate complexities of non-permanent hiring can seem like an impossible task for many HR professionals. Recent polls from NPR/Marist indicate that 1 in 5 jobs in the USA are temporary in some capacity. As firms rely more and more on contractors, there are many implications to consider. According to an Ardent Partners study, the number one challenge for contingent workforce staffing is making improvements to compliance processes, among other common issues.
Common Challenges with Contingent Workforces
We at The Planet Group just so happen to be temporary workforce experts and want to set the record straight about compliance. Let’s examine how you can maximize the benefits of hiring non-permanent workers while minimizing the stress of meeting compliance standards.
WHAT ARE THE CHALLENGES OF INCREASING YOUR NON-PERMANENT WORKFORCE?
There are many variables to consider when increasing a company’s non-permanent workforce. Here are some immediate areas that you should keep in mind:
- HR law compliance issues
- Exposition to financial, criminal, & reputational risk
- Lack of policies/processes to enforce compliance with regulations
- End-to-end supply chain management
Contingent workforce management should be guided by detailed systems and policies that cover factors such as organizing benefits, paperwork, and everything in between.
THE ADVANTAGES OF USING A CONTINGENT WORKFORCE
There are significant benefits to using a temporary workforce. Companies enjoy big tax savings since independent contractors are responsible for their FICA, federal, and state taxes. Not to mention, they are exempt from unemployment contributions.
There are three primary areas where a temporary workforce can build your business:
- Tax benefits
- Productivity
- Overhead savings
Multiple studies show that HR professionals are increasingly utilizing a contingent workforce. Many companies find that temporary workers are more productive than permanent staff, working harder to maintain their job status. In fact, 48% of HR professionals note that non-permanent workers perform at a higher quality than regular workers. On top of this, 46% of HR professionals state that hiring contractors saves money and provides skillfully targeted expertise.
BEWARE OF COMPLIANCE PITFALLS
Even though there are many benefits to maintaining a temporary workforce, it’s by no means easy for HR professionals. There are loads of factors to consider if you handle hiring in-house. Below is a selection of compliance factors that your team should keep in mind:
- Employment status
- Applicable employment law
- Civil and criminal liabilities
- Data privacy
- Health and safety
- Background checks
- Training
- Immigration
- Diversity and inclusion
There’s a lot to consider here for any HR team. Some of the most common issues we see include the misclassification of contingent workers, which can result in harsh penalties and back payments. We often see complications arise with the quality of contractors who aren’t appropriately screened according to company standards. These complications can impact culture, consistency, and more.
Even Google has recently dealt with large scale issues surrounding their ‘TVC’ (temporary, vendor, contract) workforce. Their open letter complained that as Google’s ‘shadow workforce,’ they were treated as second-tier employees. The TVC workers staged a company-wide strike that demanded better inclusion, communications, and structure. Not only was this a problematic internal matter to deal with, but Google also faced negative press that hurt their brand image as a result.
WHY IT’S A GOOD IDEA TO OUTSOURCE CONTINGENT WORKFORCE SERVICES
At the Planet Group, we offer managed contingent workforce services. That means we take care of all the hiring and compliance management so you can enjoy the full advantages of a top-quality temporary workforce without the scare of compliance issues. Consider this: a successful temporary workforce program can streamline your operations: less wasted time and more costs getting cut. We see many companies with fragmented processes that inefficiently manage, track, and pay their contingent workers.
Let’s examine the benefits of managed services (MSP) below:
- External Business Partner Policies: The Planet Group sets out a clear policy framework that makes the terms of our relationship clear while clearing you of liability.
- Routine Audits: We don’t let our partners end up like Google. We audit the process to ensure that your method is compliant, fast, and efficient.
- Clear Guidelines: We establish clear guidelines that adhere to a range of international norms.
- Enforcing Compliance with Labor Laws: We actively mitigate any risk by systematically adhering to the standards of employment regulations for our clients.
- Vetting Protocols: Quality is paramount, and we uphold strong standards for our contingent workers. We don’t mess around when it comes to excellence.
- Co-employment Risk Mitigation: We ensure that our clients are protected with secure contracts that absolve you from legal issues of any kind.
It’s incredible how much time and money you can save by doing two things. First, effectively utilizing a contingent workforce. Second, deploying an external provider that can manage it for you.
The Planet Group manages a world-class global talent network made up of temporary workers, freelancers, consultants, independent contractors, and other non-payroll employees. Over the past 20 years, we have used tried and tested MSP processes that make everything easy. Your team chooses the exact level of service required and quickly reaps the benefits.
Our processes help our clients reduce workforce costs while increasing the speed and effectiveness of your non-permanent workforce hiring process. At the same time, you won’t have to worry about compliance issues such as misclassification and co-employment risks. Want to learn more? Request a no-obligations Capabilities Call to find out if MSP is an excellent solution for you!