Change can be a scary thing. In our modern world we have the ability to effect and control things that would have seemed like science fiction not that long ago, but two things we have yet to figure out how to control are time and change. They happen whether we want them to or not. Whether it be the seasons, our age, technology, or tradition. Look out the closest window from where you’re reading this; it’s happening right now. Most of us fail to notice daily change and even less find the time to think about the big picture. Tasked daily with the duty to fulfill the needs and requirements of our jobs and busy lives outside of work it’s easy to forget to stop and think about change in the context of the big picture. There’s mortgages, kids, education, retirement, and (hopefully) a little vacation and social activity to worry about as well. However, it’s long term and big picture thinking that keeps us motivated, helps us shape and sharpen the daily decisions of our lives, and give us the ability to remain focused even through short term pain or discomfort (See: that fitness plan). Change, both large and small is a healthy and natural part of our human existence. So, as we’ve continually heard that a business is only as good as the people it employs, and corporations are in fact people under the law, then perhaps it’s time to start applying the rules that work for people, to enterprise.

In an interesting piece on Strategic Sourcing, that is, a specific plan of action regarding the procurement and hiring of top talent, Argentus Talent Acquisition poses the question: Who is better to Effect the Toughest Changes in Strategic Sourcing? Your Permanent Team or Third Party Contractors? (Go here for the full article) They deduce that the contractor/consultation model allows for greater opportunity for change within your organization by allowing for a fresh perspective and minimizing the personal and political hurdles that can stop an organization from moving away from the status quo.

If we apply this same line of thinking to the larger context of Contingent Workforce Management, it may be time to ask: When is the last time your enterprise truly thought about the long term goals regarding your Contingent Workers? And are small steps being taken daily to effectively embrace that strategy? As we’ve already discussed, change is happening, the only variable is how we respond to it.

 

Ardent partners are set to release new research later this month that indicates that Contingent Labour is set to rise 30% over the next three years, a figure that they state “Accurately represents the growing reliance on the non-traditional workforce.” If you follow Contingent Labour, deal with mitigating risk on independent contractor compliance, or Talent Management and Procurement, you know the stats already.  It’s very easy to get lost in them. While effective, they can also over complicate the matter at hand. Enterprise at its core needs to innovate, it needs to be adaptable, and it needs skills present to make those first two things achievable. If the big picture is growth and competitiveness in the marketplace, then it’s a major priority to always make sure the base needs of innovation, adaptability, and skills are constantly being met.  Even if the path to get there requires some short term pain or discomfort.  (See: that fitness plan again) More and more, it is Contingent Labour that is being utilized to meet these needs—and while cost savings is usually the most immediate and alluring statistic in moving an Enterprise into this type of model, it can’t be the only thing. Sure, in the short term, it’s easy to be won over by the idea of utilizing IC’s (independent Contractors) to have flexibility in staffing, or save money on taxes and entitlement & benefit programs, but cost savings needs to be looked upon as daily actions of a larger goal, not the entire plan. Or, as we’ve looked at it previously, the small change that sets up the big change.

Long term change, requires long term strategy. If Contingent Labour, is at the core of your business than it’s time to start putting the plans in place to manage it. Whether it be through an Administration or Payrolling Service for your Contingent Workforce, Managed Services, or through Consulting. Not thinking long term about the inevitable change, management, and caliber of your Contingent Workforce may get you through today, but perhaps it’s time to turn that age old interview question on your own Contingent Workforce Management plan. Where do you see it in 5 years? How about 10?

Restaurants have always been a deliciously perfect mix of temptation and entrapment. Take a bunch of hungry people,  stack them by the dozens in a room surrounded by drool educing aromas, and then drop an entire menu full of options and choices in front of them. More often than not the hungry masses will leave satisfied, but they’ll probably have to put on their glasses to believe at how much the meal actually cost. The lesson: Hunger trumps budget, almost exclusively.

The same could be said for the proverbial buffet of Contingent Labour flooding the market. With businesses staffing their ranks from this talent pool at record highs, it’s truly a feast fit for a king for companies looking to tackle their project based labour needs. According to a recent report published by IQ Navigator-who provides technology that manages staffing vendors and temporary workers-even with the rapid growth in the use of Contingent Labour in 2013, costs stayed relatively flat. As with any great meal out however, cotemp-labor-bill-ratesmes the bill.

Contingent Labour hit record highs in 2013 with a total of 17 million workers in the market. Which works out to be almost an 8% jump from the previous year with no signs of slowing down. That number is expected to grow to 23 million by 2017 (MBO Partners). With analysts predicting what Gary Pollard (VP of Information Products at IQ Navigator) calls “upward pressure” in 2014, companies that got into the market to save on labour costs could be looking at a giant bill, not a giant profit. The reasons for this steady rise in the cost of using temporary workers will be associated with “A continued increase in demand, coupled with an expected tightening supply of workers-thanks in part to a declining workforce participation rate, and an increase in college enrollment for people over 25 years old.” Pollard also goes on to say that the aging Baby Boomer population will also contribute. 

Considering staffing agency markups are generally 20-25%, the math does look daunting. A worker in IT currently making 30 dollars an hour (a position poised for a steep raise, but more on that later) may go to 45-50 dollars an hour. That’s an increased profit to the staffing agency of 5 dollars per hour. Over the course of the year that translates to approximately 19,200$ extra paid to the staffing agency-and that’s just for one employee. In Restaurant terms, that’s one heck of a corking fee. 

Employers are still looking to cut labour costs wherever they can, but the need for labour isn’t going to dry up. Projects will still need to be completed and expert skills will be in demand. So, if you can’t save on the labour, perhaps you can save on the mark-up. By tweaking their current model, employers could find themselves embracing direct source hiring, coupled with IC (Independent Contractor) Compliance and Payroll providers that can offer drastically smaller mark-ups and allow the company to still attract and afford top talent. This would be especially attractive to companies that already have established relationships with Contingent Workers at their locations.

 Nobody likes to be told to think long-term and look at the big picture (especially when they find themselves starving and staring at a bevy of choices and opportunity) but making the right choice in regards to how enterprises source their contingent workforce and who (through Admin and Payrolling or MSP) offers the best opportunity to cut costs, and stay compliant and competitive may allow them to have their cake, and pay the bill too.

Amidst a flurry of political and social controversy, the Olympic Games are underway, and for the international firms responsible for staffing the Sochi Games, they hope it’s all downhill from here.

Sochi’s three official staffing Suppliers: Adecco Group, Kelly Services, and Russian firm Exect Business have put three years of work into building the Contingent Workforce for the Olympic Games and the sheer numbers are staggering. The total number of temporary workers for the games may top 150,000 people, and that isn’t counting the roughly 25,000 volunteers that will be lending a hand to make sure the games run smoothly. Among those 150,000 workers 65,000 are skilled workers. These skilled workers were culled from a worldwide recruiting search, offering the opportunity for the organizing committee of the games the chance to hand pick expertise from the very best the world has to offer, as well as the chance for those skilled workers to show off their talents in front of an audience like no other. On paper it’s the perfect trade off, but somewhere along the way things went off the rails. Sochi-2014-Company-Olympics

Vancouver temporary worker Johnnie Balfour’s exposing blog posts and statements about the treatment of himself and his team at the games has been well documented. (Go here to catch up) Even an entire twitter feed, @SochiProblems emerged to document all the issues journalists and athletes alike had encountered upon first arriving in Sochi. Littering news feeds around the world with pictures of brown water and unfinished construction. While these images weren’t exactly the image that the staff and Olympic Committee wished to have us see, the big picture moment of truth for the staffing agencies of the games going forward may not be boiled down to pictures or politics. It may boil down to the larger issues of transparency and control.

For those in the business of the Contingent Workforce this is an issue of risk debated and managed daily, as the decision to either outsource or direct source (hire from within) is weighted against the factors of cost, availability of resources (skills), and time. As the world’s eyes turn to Sochi for the games, administrative/payroll miscues and a lack of communication is not the way to put our (those in the contingent workforce solutions business) best foot forward. In this case, while a pool of extremely talented and eager workers were recruited and gathered for the games, it seems as though when they got there, the communication regarding their income was (at least according to Balfour) left open to interpretation . There is nothing that will turn an IC (independent Contractor) off faster than the notion that they’re not getting paid, and in Balfour’s case, seemed to be the last straw.

As an Employer and a Business you only get one chance to make a first impression with your Contingent Workforce and Independent Contractors. Making sure your T’s are crossed and your I’s are dotted is an absolute must in an industry where word travels fast.  If your goal is to recruit and retain top talent, miscues are simply unacceptable. In the case of Balfour, the simple and affordable option of an IC Compliance and Payroll service could have been made available to figure out payment options and schedules before he even left for Sochi, and in the process, saved the staffing agencies responsible for 150,000 workers the potential firestorm of being made to look as a willing participant in the headache inducing and livelihood threatening payroll practices of the Sochi Games.

There is truly no replacement for transparency and efficiency in this business and the sheer size and publicity of this only goes to remind us that even a small administrative miscue or oversight can become a giant problem.    

If all goes according to plan when the games close on February 23rd, viewers will hopefully be inundated with images of the athletes’ fists in triumph, their tears in defeat, and memorable moments of sportsmanship and diplomacy. Not pictures of brown water, unfinished construction, and the supposed mismanagement of temporary workers. If the stumbles in the weeks leading up to the event are any indication, the staffing agencies may be the ones in the front row cheering the loudest for the athletes to steal back the spotlight.

Jeff Nugent, Managing Director of Contingent Workforce Solutions (CWS), answers: What is Direct Sourcing? How does Direct Sourcing benefit organizations?

After a rather flat bill rate for Contingent Workers in 2013, analysts are predicting a sharp rise in the latter half of 2014. According to Robert Half Technology and The Creative Group, here are the positions that will see the sharpest rise in salary in 2014

money 1. Mobile applications developer: Experienced mobile applications developers can expect to see the largest increase, 7.8 percent, in starting compensation of any tech position listed in this year’s Salary Guide, with salaries ranging from $100,000 to $144,000.
2. Business intelligence analyst: Skilled business intelligence analysts can anticipate a 7.4 percent boost in starting compensation in 2014, with salaries ranging from $101,250 to $142,250.
3. Information systems security manager: Information systems security managers who can assess and re-mediate vulnerabilities, threats and intrusions are in demand, and are projected to see a 6.8 percent bump in base compensation this year, with average starting salaries between $115,250 and $160,000.
4. User experience designer: User experience designers can expect to see average starting salaries between $78,000 and $120,000, up 7.5 percent from 2013.
5. Mobile designer: Skilled mobile designers can anticipate average starting salaries to increase 6.3 percent in 2014, to the range of $66,000 to $103,000.
6. User experience specialist: User experience specialists can expect to receive base compensation in the range of $79,000 to $118,000, a gain of 5.9 percent over last year.

 

*Source-SIA (Staffing Industry Analysts)

Are you a Vente Soya Latte? How about just a little sugar? Or perhaps you’re a pumpkin flavored specialty coffee type of person? That notion in and of itself when ordering a coffee isn’t ground-breaking (or even news for that matter), but unless you’re lucky enough to be on the receiving end of a goodwill parade chances are you are the only one that really knows how to order your caffeinated beverage of choice. You probably don’t even think about it. BUT, if next time you walked into your favorite establishment they took down the menu, hid the flavor syrups, blanketed the baked goods trays, and just put a small number of choices in front of you chances are this may raise some concerns.  So, the question then is this. When ordering contract talent why would you limit yourself by putting the essential lifeline of an organization, i.e. the attracting and hiring of top talent, in the hands of external firms who you may have never met you and possibly never even set foot inside the doors of your organization?

It’s probably not something you’ve ever even stopped to think about, but in a way this question is quite perplexing. We all inherently know the needs of projects in the workplace. You may not have “recruiting” expertise yourself, but chances are you do understand the requirements of the problem at hand. You know the skills and background of those that are needed on the team and above all, you know the attitude and personality of team members you want to work with. Now, this is not to say that external staffing agencies don’t offer services that can be effective but its perplexing and very limiting to only use staffing firms as your sole option to find resources without checking to see if you or your company can find talent through its own network of referrals, quick posts to a career sites on the internet or social media networks like LinkedIn.  Arguments for using external firms to attract and recruit top talent often include time savings, lack of a recruitment expertise at your location, or the even the old adage that “we have always done it this way”.  Each of these reasons may prove to be legitimate, but with the contingent workforce continuing to grow as a percentage of the workforce and the large mark ups baked into the rates paid to staffing agencies showing signs of going up, it’s important to understand the alternatives and the respective cost of each resourcing alternative to your organization.

As the need for contract workers rises, the sole reliance on a staffing agency and the lack of control of the process could lead to issues (See the following). 

Facing obstacles to hiring top talent and the need to reduce labor costs, many companies are adapting to a Direct Sourcing model (hiring contract workers through their own efforts without the assistance of a staffing firm). In the past this may have seemed counter-intuitive, but with access to sizable pools of contract talent being provided through referrals, by the internet and social networking sites such as LinkedIn it is now extremely easy to connect with and hire contract resources directly.  To complement the direct sourcing model there is a rise in low mark-up contractor compliance and payroll providers that help reduce the administrative effort in processing contracts, timesheets and invoices while also helping to navigate through the complexity of HR and Tax laws issues that may exist.  With examples of direct sourcing being cited to have increased quality of hire, reduced hiring times (averaging less than 5 days), and saved millions of dollars annually in reduced bill rates, companies may find that taking more control over their hiring options is an effective way to access the right people, at the right time, at the right price.  If nothing else, taking control of the process is certainly something to ponder next time you’re handed that decaf tea by mistake.

 

 

 

Short answer: Buyer Beware!

Falling on a banana skin

Many Employers are under the assumption that they can easily outsource IC misclassification or other employment and tax law liabilities by payrolling their independent contractors through a staffing firm or managed service provider (MSP).  Although “bundling” IC misclassification, and employment and tax law compliance in with your existing contingent workforce staffing and/or MSP providers may seem like a smart idea, the reality is that in many cases, employers are paying millions of dollars to these providers in fees and receiving very little protection if any at all.

The problem with taking this “bundling” approach is that most of these providers lack the focus and knowledge to implement a fully compliant IC verification process. Many providers over-trust the power of their contracts. Although a contract is an important part of defining the relationship the rules governing the classification and the tests applied by auditors look at the true working relationship vs. what is written on a contract.  Therefore putting faith in the phrase “we have a contract” vs. having your provider perform proper worker education and deep due diligence and offer full visibility into the classification of the workers is a very risky proposition.

Focused compliance experts perform all of the detailed verification and worker education required to properly vet the situation and obtain the necessary detail to defend a tax authority or legal claim.  In the absence of proper due diligence and verification in advance of an engagement it is often entirely up to the worker to determine the “nature” of the working relationship.  When looking at the details of the majority of reclassification cases lack of proper due diligence and worker education upfront have resulted in workers whistle blowing on their employers or  inadvertently triggering an audit after filing for government based benefits such as unemployment insurance or in the case of an injury, workers compensation insurance.

Moreover, precedents have been set where the IRS, and other state and federal agencies, have deemed transparent all of the layers between the provider of services [contractor] and the receiver of services [employing firm] for the purpose of assessing the relationship. So, in practical terms it doesn’t matter how many layers are between firms and the IC/1099s – the IRS will treat the relationship between the “worker” and “firm” as direct. The result is any misclassification assessments, penalties and fines are the liability of the firm as much as they are the liability of the staffing firm.

New legislation tabled in Congress last year called the “Payroll Fraud Prevention Act” is looking to require Employers to perform mandatory worker classification and inform the workers of the classification prior to the engagement to ensure that the workers that have been classified as Independent Contractor/1099 are actually independent and understand the pros and cons of their classification.

In building a business case to make this a priority within an organization it is also important to note that since worker misclassification can be deemed payroll fraud these liabilities “pierce the corporate veil” – meaning that corporate officers and directors are personally responsible for source deductions and reclassified wages.

 

The Solution:

The first step Contingent Workforce Solutions recommends is to perform a Risk Assessment that will give you a diagnosis of the firms’ contract workforce Risk.

The first phase of the Risk Assessment is to take an inventory of your non-employee headcount.  This activity should help in identifying who within the organization is working as an Independent Contractor, a temp employee or an employee of another consulting organization. In many cases contract workers are spread throughout organizations with very little visibility – having been brought in by various departments in any number of ways. Once the identification of all of your contract workers occurs an estimate of the potential liability that could accompany an audit can be calculated.

The second phase of a Risk Assessment is a detailed assessment of each individual worker to determine their worker classification and or their eligibility to work legally.   With this information you can identify who should be treated as a W2 and who should be IC/1099.  More importantly during this assessment you can identify potential worker misclassification risks where workers who you believe are independent contractors / 1099’s are not thinking or acting like independent contractors.

 

 

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Article_Arrest
A staffing company operator in Ontario Canada was fined almost C$1.3 million (US$1.2 million) and sentenced to four years in jail, the Canada Revenue Agency announced Tuesday. The owner of the  staffing companies did not remit proper payroll and income tax deductions to the government, according to the agency. According to court records  The Staffing Agency failed to remit approximately C$5.8 million owing to Canada Revenue Agency. The Director of the Staffing Agency will have one year to pay the fine upon release from jail, or she will serve an additional five years in jail.

A related party who owned a business that used the services of the staffing companies was also sentenced to two years in jail and fined C$397,758 (US$373,499).  As per the Canada Revenue Agency report the owner of TPM Machining Group knowingly used the services of the staffing companies to avoid remittance of payroll and income tax deductions, the agency reported.

This case highlights how client organizations need to perform a higher level of due diligence on the staffing firms they have within their supply chain to gain better visibility into the staffing firm’s ongoing compliance with payroll, employment and tax laws.  Even with a complex structure of contract and agreements in place, the CRA was able to establish that the client of the staffing companies knowingly used the services of a staffing agency to avoid remittances of payroll and income tax deductions and was therefore able to assess fines and jail time to the client’s management.

To view the original article CLICK HERE

awardwinnerMississauga, Ontario – November 7, 2013– Contingent Workforce Solutions (CWS) is pleased to announce they have been awarded the 2013 Health & Safety Award by the Association of Canadian Search, Employment and Staffing Services (ACSESS).  As Canada’s National Staffing Association, ACSESS oversees the monitoring and governance of industry best practices.

The award is presented to a company in the staffing and human capital services industry that has demonstrated outstanding performance in workplace health and safety (H&S). The judging criteria was based on the following considerations: leadership in demonstrating a commitment to H&S; innovation in the communication and awareness of H&S information; visionary leadership in the planning, development & implementation of best of breed H&S practices and participation in the community and industry health and safety programs.

Contingent Workforce Solutions’ innovative Health & Safety program called, WorkSafe, has been custom developed to help independent contract and temporary workers work safer and prevent workplace injuries and hazards.  CWS’ program was designed to build outstanding awareness that escalates the importance of Health & Safety for contract and temporary workers. Through its very efficient online orientation system and dedicated approach, CWS ensures the timely enforcement of worker education, workplace inspections, and proper incident responses to ensure a safe and healthy environment for all. CWS’ WorkSafe program is compliant with Provincial legislation in Canada, and State/OSHA legislation in the US.

Jeff Nugent, Managing Director of CWS says, “I’m very proud that Contingent Workforce Solutions has been recognized as a leader in the area of Health & Safety. Our team has worked very hard to develop a leading edge program that promotes the health and safety of all workers, especially contingent workers who are often overlooked when it comes to worksite and job specific health and safety training.  It is very important for us to meet the needs of employers that are looking to ensure compliance, and to mitigate their overall risk when dealing with contract and temporary workers.” Nugent goes on to add, “We believe that ensuring our workers safety is just the right thing to do and we look forward to continuing to develop innovative Health & Safety and other value added programs for our clients in the years to come.”

 

About Contingent Workforce Solutions

Contingent Workforce Solutions provides Contract Workforce Management services and technology that enables corporate and staffing agency clients to centralize the process of engaging, administering and paying contract, temporary and project based workers in an efficient and risk free manner. Through its highly developed processes and technology, CWS allow clients to streamline their processes, reduce risk and save money. As experts in the field, CWS provides independent contractor & worker classification that ensures its client’s workers are administered in compliance with employment and tax regulations.  For more information please visit www.contingentworkforcesolutions.com

About ACSESS

The Association of Canadian Search, Employment and Staffing Services (ACSESS) is the single voice for promoting best practices and ethical standards for the recruitment, employment and staffing services industry in Canada. With more than 1,200 member offices offering staffing solutions in the areas of professional search, and temporary and contract staffing, ACSESS members provide a key service to businesses and offer a broad range of career planning and employment opportunities. For more information please visit http://www.acsess.org/

jeffstaffing100

Contingent Workforce Solutions (CWS) is pleased to announce that its Founder and Managing Director, Jeff Nugent, has been named to Staffing Industry Analyst’s 2013 Staffing 100’s list.  The list, now in its third consecutive year, recognizes the 100 most influential people in staffing globally.

These professionals are shaping the way people work and think about jobs. We salute this year’s honorees who have helped millions of peoples find jobs and more importantly are the visionaries that are taking the industry to the next level –  Subadhra Sriram Editorial Director for Staffing Industry Review Magazine

As the founder and managing director of Contingent Workforce Solutions, Jeff Nugent is a pioneer in contingent workforce management. His firm provides contract talent management and compliance services to employers, staffing firms and independent contractors. Jeff boasts 55,000 Twitter followers and is the founder and managing editor of the Contingent Workforce Strategies group on LinkedIn, where HR, procurement and CWM professionals can network, share ideas, trends and best practices. Nugent serves as an expert contract talent advisor for HR.com and has taken on various speaking engagements and advisory roles. Founded just four years ago, Contingent Workforce Solutions expanded quickly through Canada, the U.S. and Europe.

To view the full list of professionals named to The Staffing 100 click here.