Now that the holiday dust has settled and we are back to our daily routines, I thought I’d re-visit the definition of “risk” and how it might affect the workforce in 2011. As we all know, compliance risks associated with independent contractors were a hot issue in 2010, making up a bulk of the news coverage about the workforce. Do we all know more about these risks now? And the better question might be do we understand how to mitigate these risks more effectively as a result?
Businessdictionary.com defines risk as the “probability or threat of a damage, injury, liability, loss, or other negative occurrence, caused by external or internal vulnerabilities, and which may be neutralized through pre-mediated action.”
We all define risk differently. As a mother of 14-month-old twins, the threat of damage, injury and negative occurrence lingers around every sharp corner or slippery floor. For a company the threat of liability, loss or other negative occurrence lies in the lack of understanding, preparation and structure to support its independent contractors.
So, now that risk is defined, how can it be managed? Compliance can get a bit dry, so I thought I would have fun with it and explain how my day-to-day activities as “mom” help mitigate parenting risks. Perhaps you can relate.
• Identify the most likely areas to cause injury or harm to your organization. Where are you exposed? My husband and hired a company to conduct an audit of all the potential areas of “risk” for our toddlers. As a result, our home is sufficiently baby proofed and all non-child-friendly objects are out of reach.
• Establish Structure by developing rules, contracts, and measures to define and manage your independent contactors. We installed gates and locks to contain our curious twosome to areas we could monitor and manage effectively.
• Communicate to and Educate your organization on the damaging effects of compliance breaches, making sure they have the tools and access to information they need to comply. I convey risk to my twins by waving my finger with a stern “no, no, no” when they are in potentially dangerous situations. Some parents prefer a more strict method, but I believe firm repetition is effective.
• Remain Consistent in your messaging and follow up. It is important to ensure 1099 rules are not forgotten, and are constantly reinforced once the projects start. Putting the policies in place is only half the battle. Managing and maintaining a consistent, organization wide unified front is key. At home, we make sure everyone is on the same page with bedtime, play and various house rules. This way the kids (and caretakers) are a team, are not easily confused, and risk is mitigated. As a result, security and harmony are maximized.
Well, that’s how we manage our risk at home. Can you easily apply these guidelines to your independent contractors? Do you have any other tips to share?