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.

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.

 

 

 

Last Tuesday, President Obama delivered his administrations’ most recent message to the people of the United States– and for those who’ve grown accustomed to these things, it was the usual banter and pageantry of goals and aspirations to improve the nation. However, among the policy discussions and rounds of applause was one nugget in particular that is relevant to those of us who follow such things. The impending rise of the minimum wage (at least for federal contracts) and its impact to the issues surrounding worker classification(s) and employee/employer relations. President Obama didn’t directly address the situation, but in an online piece for Forbes, columnist Robert Wood, put the issue on the table. “Did President Obama just make independent contractor v employee issues even bigger? Arguably, yes.”  obama_sotu_dann.photoblog600

Wood does play down the notion that every employer in the country is suddenly looking for loopholes or to reduce labor costs in the face of new legislation such as the minimum wage debate or healthcare, but he cautions both employers and employees to take a hard look at their relationship with one another.

In 2010, Department of Labor Secretary Seth Harris quoted a study that suggested up to 30% of employers misclassify workers, whether by simple oversight, or willful negligence, and the Government Accountability office is also quoted in Harris’ address as stating the IRS is losing billions of dollars in revenue.  Harris goes on to suggest that this type of negligence and oversight is hazardous to the economy, and causes the long term effects of a loss in tax revenue, and public funded programs such as Social Security. Even as recently as two weeks ago, online publication Benefitspro suggested that 2014 would be the year lawmakers and regulators firmly crackdown on misclassification. However, what may be the most glaring statements from both the DOL study, Seth Harris, Benefitspro, and Mr. Wood, is that there will be no compromise in terms of how misclassification is treated by organizations like the IRS or the CRA. In other words, it doesn’t matter how it happened. All that matters is that it happened at all.

So, left with this potential crackdown the natural follow up is what’s next? Since every study and report indicates that contingent workforces are not going anywhere anytime soon,  and in fact, will only continue to grow, 6a00d8345675df69e20167686b88a0970b-400wiIndependent Contractors, Employees, and Employers need to have crucial conversations regarding the nature of their relationship. Contracts alone won’t cut it anymore.  For employers looking to navigate the complex worker compliance labyrinth, there are plenty or resources at their disposal, but what is proving to be true as more and more non-compliance issues are raised on both sides is the need for specialists in this field.  With the intricacies of legalese and the monotony of ever changing legislation, oversights can become easier and more common–but beyond all that it really goes back to a simple concept of clear communication and discussion of needs. What does the employer specifically require? What does the potential employee/contractor require? How will this relationship be supervised? Where can we educate ourselves to make sure our relationship will be compliant with the law? In most cases, the proper classification can be quickly deciphered with just a few simple conversations, and for employers looking to navigate the  complex worker compliance labyrinth, there are plenty or resources at their disposal.

While the reasons and needs of a contingent workforce may differ by the industry, there’s seemingly one thing that everyone with stake in the state of the workforce can all agree on.  The no-nonsense and zero tolerance approach of both lawmakers and regulators looms large on all parties involved in 2014, and taking the proper precautions is paramount in the face of liability enforcement policies, changing legislation, and the increased ability of government agencies to share information.

 

*Contingent Share of Workforce courtesy of the SIA

 

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.

 

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The CWS Team is in Chicago this week to kick off the CW Solutions Forum! As an Optimum Sponsor of the event we are participating in innovative and thought leadership driven sessions focused on  Worker Classification, Compliance, and Risk Mitigation

As an added bonus we invite all attendees to drop by our booth to enter into our draw for an iPad Mini.

BE SURE TO STOP BY CWS BOOTH #15 TO ENTER THE DRAW!

 

Tuesday September 10, 2013
9:00 AM – 10:30 AM  ROUNDTABLE DISCUSSION #12
Open Table – Risk Discussion
 
Details: Join Contingent Workforce Strategies LinkedIn Group Editor and Managing Director of Contingent Workforce Solutions Jeff Nugent, as he facilitates an open table discussion on the topic of risk and risk management. This will be an interactive session where participants will be able to share and discuss their experiences, best practices and future risk mitigation plans.  Risk topics will range from Worker Misclassification and IC Compliance, to Health & Safety, to Operational and IP protection. 

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11:00 AM – 12:00 PM  Concurrent Session: Risk Track 
When Safety Matters. Workplace Safety and the Contingent Workforce.

Details: Workplace accidents happen to be an unfortunate reality for many companies to deal with in today’s economy. When these accidents happen to involve the contingent workforce, who bears  the assignment of liability and brunt of the cost can often be unclear, resulting in tremendous penalties, fines or judgements. What can you do to protect your company? How should your relationships be structured? Kersten Buck, Director, Strategic Solutions, Staffing Industry Analysts moderates this interactive Panel Activity with Experts Jeff Nugent, Managing Director of Contingent Workforce Solutions & Eric Rambaugh Partner, Michael Best & Friedrich LLP. From workers compensation exclusivity to OSHA compliance and enforcement, this workshop will explore the myriad ways program managers can manage their companies liability while creating a safe workplace environment for everyone.

 

For more information and to schedule a meeting with one of our representatives contact:

Christina Fabugais

P: 1-866-837-8630 Ext. 9077

E: info@contingentworkforcesolutions.com

 

Organizations cannot afford to approach their contingent workforce management in an ad-hoc, as-needed manner. They must begin to manage their entire workforce, including the contract and temporary segment, efficiently. A third party can assist organizations to create an effective contingent labour management program that gives visibility into the costs, mitigates risk, and provides a record of the worker’s employment with the organization.

Aberdeen research surveyed companies and divided these organizations into best-in-class, industry average, and laggard categories. The best-in-class category consisted of organizations that were in the top 20% performers. They had 87% compliance to federal/state/regulatory labour and tax policies concerning contingent workers, 4.4 contingent worker quality ranking score, and 21% contingent worker spend savings.[1] These organizations have implemented many best practices that organizations should imitate when using a third party or managing contingent labour internally.

There are various third parties that organizations can use that provide different aspects of a successful contingent labour management program.

  • Independent Contractor Engagement Specialists (ICES) work with organizations to manage independent contractors — including high-rate, project-based SOW (Statement of Work) consultants — by acting as an Agent or Employer of Record (EOR) for IRS purposes. ICES will assess the eligibility of a potential contractor for 1099 status. If they are found ineligible, ICES will hire the worker as their own W-2 employee, allowing him/her to work for the client on subcontract. For those that are eligible, ICES will act as the “Agent of Record,” simplifying the process for their clients.[2]
  • Vendor Management Systems, or VMS, are technology solutions that provide visibility into how many contractors a company is using, for how long, and for what. These technology solutions provide visibility into the cost of the overall contingent labour program. The basic systems handle everything from requisition to off-boarding, including hiring approvals and processing time sheets and invoices.[3]
  • An MSP (Managed Service Provider) is an out­sourced service provider who is responsible for procuring and managing contingent workforce needs according to client requirements. MSPs may or may not offer a Vendor Management System (VMS) of their own but they normally combine a VMS technology offering into the programs they run for clients.[4]

All of these third parties can be used in combination or separately. Aberdeen research has found that although all types of third parties are used by best in class organizations, a VMS was the most commonly employed third party by best in class enterprises.[5] Top performing companies were 33% more likely to employ an MSP program than other companies.[6] Best in class organizations were 60% more likely to employ ICEs than other companies, and ICEs have historically shown to increase contract worker compliance by nearly 80%.[7]

For more information about how your organization can benefit from a third party, and to find out more about VMS, MSP, or ICES, Click here or contact:

Christina Fabugais
Marketing Manager
Contingent Workforce Solutions Inc.
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077
Email:  christina.fabugais@cwsolutions.ca

[1] Dwyer, Christopher J. Contingent Labour Management: Strategies for managing the complexities of the Contingent Labour Umbrella. Aberdeen Group. June 2010

[2] The ROI in Enterprise Contract Talent Management. The Human Capital Institute. Sept 2009

[3] Muson, Howard. Treating Contingent Workers as a Strategic Resource. The Conference Board: Trusted Insights for Business Worldwide. Sept 2010

[4] The ROI in Enterprise Contract Talent Management. The Human Capital Institute. Sept 2009

[5] Dwyer, Christopher J. Contingent Labour Management: Strategies for managing the complexities of the Contingent Labour Umbrella. Aberdeen Group. June 2010

[6] Dwyer, Christopher J. Contingent Labour Management: Strategies for managing the complexities of the Contingent Labour Umbrella. Aberdeen Group. June 2010

[7] Dwyer, Christopher J. Contingent Labour Management: Strategies for managing the complexities of the Contingent Labour Umbrella. Aberdeen Group. June 2010

Contingent Workforce Solutions (CWS) is pleased to announce that it has been chosen as a GTA finalist in the Deloitte’s 50 Best Managed Companies. We are honoured to receive this recognition only three years after our company’s inception, and we are grateful to be listed among the other successful finalists.

Canada’s 50 Best Managed Companies continues to be the market of excellence for Canadian-owned and managed companies.  Now in its 19th year, this is one of Canada’s premier business awards. It celebrates companies that demonstrate vision, passion and achievement in their daily business[1].

CWS is thankful to all of its employees for working hard over the past three years and bringing CWS the success it has achieved. Congratulations to the other Deloitte 50 Best Managed Companies finalists and good luck with phase two of the award selection process.

[1] Deloitte 50 Best Managed Companies. http://www.deloitte.com/view/en_CA/ca/insights/multimedia/podcasts/e086ac37004b6210VgnVCM200000bb42f00aRCRD.htm

Staffing Industry Review recently published an article entitled “Don’t Fight Your MSP” that outlined the benefits that one supplier saw by embracing an MSP. The staffing firm profiled in the article was able to grow from a local company into a national company.

Many small to mid-size staffing agencies start to feel comfortable once they have created a lasting relationship with a local division of a fortune 500 company. However, many Fortune 500 companies, and other mid-size companies, are now implementing larger, organization-wide MSP programs that consolidate the hiring process.

This is a scary proposition for a small to midsize staffing firm. With an MSP, staffing agencies lose their sales relationships with managers, they need to deal with MSP fees, audits, and controls around margins. Many of these firms choose to fight the MSP by continuing to deal with organizations through back channels. While this may work in the short-term, it could be suicide in the long term.

With a properly managed program, the customer will know which suppliers are using the program to drive business and which are dodging the program by providing ad-hoc resumes hoping that one will stand out. Suppliers that use the later method risk being dropped altogether, while those that use the former actually stand to increase their business.

An MSP can appear to be a barrier to staffing firms, but if they embrace the program, they stand to gain business opportunities on a national and even international level.

For more information about how you can create an effective partnership with an MSP provider, click here.