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Derek Stephens has started a discussion: Eliminating The 5 Major Risks In Contingent Staffing And Workforce Management "While contractor staffing can be extremely lucrative and much more secure from an income standpoint than permanent recruitment, there are massive risks and potential dangers that come with contingent workforce management, which every recruiter – whether already thriving or just getting started in contingent staffing – needs to be aware of, if he/she is to have long-term success. Let’s take a look at the five major risks and potential pitfalls in contingent staffing: 1. Employee Misclassification Risk. Contingent workers who are on 1099 but are working in a full-time role with a client are at risk of IRS Employee Misclassification. This carries huge potential tax implications and government assessed penalties to all parties involved, including the client, agency and contractor. 2. Employer Practices Liability and Employer Compliance. Recent studies show that contingent workers are up to five times more likely than permanent workers to file harassment, discrimination, and other workplace-related complaints, thus exposing agencies, clients and their Partners/Directors to lawsuit risk. As for compliance, thousands of contractors are not being paid in accordance with their given state’s requirements. Whether it be an issue of improper pay frequency, unpaid mandatory overtime premiums, or state-required mandatory sick leave, agencies and clients stand to incur big penalties if found to be out of compliance, which can happen as easily as a contractor filing a complaint with the Department of Labor. 3. Rising Unemployment Insurance Rates. Contingent worker claims for unemployment insurance are on the rise and are being granted at the expense of the client or agency. The more claims, the higher the rate you pay. A single unemployment claim from a 1099 contractor could lead to a determination of misclassification, and result in damaging consequences for all parties (see point 1). 4. Worker’s Compensation Exposure. Workers comp. markets are hardening to the staffing industry. Providers are becoming extremely reluctant to issue these policies, and thus many agencies are illegally paying contractors without proper workers comp insurance in place, exposing themselves and the client to a variety of potential lawsuits. 5. General Liability Exposure. Thousands of contractors are working without liability insurance, leaving their clients and agencies exposed to substantial risk in the case of a critical on-site error, or damage to intellectual or physical property at the workplace. If contract recruitment represents even a small portion of your revenue, you'll need to know how to identify and remove these risks right away. As a staffing professional, there’s certainly no shame in admitting that your strength is driving revenue, through the core “growth” activities - Recruiting, business development and client relations/account management. Admin and back-office tasks often only slow down the front-end process, and in a lot of cases, there are still massive exposures and liabilities despite the efforts and time spent in this area. What if there was a way to completely remove the risk of contingent workforce management, without you having to commit more time to the process? In fact, what if the risk could be mitigated, AND you get more of your time back in the process? I’m happy to spend a few minutes on a call with you, explaining these risks in greater depth, as well as providing you a list of suggested options for taking corrective action. To set up a call, an in-person consultation or to request more information electronically, Contact me directly at: Derek.stephens@thepgcgroup.com" | ||||||
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Monday, July 22, 2013
New discussion Eliminating The 5 Major Risks In Contingent Staffing And Workforce Management
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