Avoiding a Costly Relationship
Contract staffing has long been recognized as a cost-effective and smart solution to deal with the requirements of a technology landscape that is constantly in flux. Many companies have leveraged contract workers to acquire highly skilled staff for a set time period or project. This approach is more efficient, as it reduces the ramp up time, allows for better budget management and decreases the burden on the Human Resources and Payroll teams.
Conflict arises when this business model is not implemented correctly and contractors may be classified as common-law employees. Co-employment issues may arise when a company overreaches its authority over a contractor, and treats him or her as a regular employee.
In 2000, the Microsoft Corporation settled a very publicized suit that brought to light the risks and liabilities of co-employment. The cost to the tech giant, almost $97 million, and the circumstances garnered national coverage. The claim was based on the fact that Microsoft acquired services from freelancers and independent contractors and left them in these positions, in some cases for years, to do the same (or similar) jobs as full time employees. A lawsuit resulted in the the court classified them as employees. The damages of settlement compensated, in part, for the benefits lost, including vacation and personal time off, health and life insurance, retirement, and the opportunity to participate in the employee Stock Purchase Plans (SPP).
How to Set a Proper Contractor Relationship
Our goal is to create a successful contractor relationship that has long been recognized as
a cost-effective and smart solution to deal with the requirements of a technology landscape that is constantly in flux. The level of flexibility afforded by this business model, in addition to the lower expenses when compared with the burdened cost of a full-time employee, makes this a viable alternative, as long as it is done correctly.
Following our proven methods, we create a solid and transparent plan that focuses on your business needs. As your contract staffing firm, the InSource Group will:
- Work with you to outline the scope of work, duration of the assignment, requirements and working conditions.
- Assign the most qualified professionals available to meet your needs.
- Manage their compensation and benefits, as these individuals are our employees.
- Provide basic training, as necessary.
- Take responsibility for their performance, discipline, complaints, performance evaluation and support.
We will review our agreements and process with legal counsel to ensure compliance. As needed, the InSource group will provide on-site supervision for large groups of contractors.
Key Points to Remember About Contractors
- Contractors should be assigned to a specific task, for a specific amount of time.
- Set delivery and task completion deadlines.
- Ensure that your benefits plans are for your employees and exclude contractors, who should be provided with their own benefits plan by their employer.
- Proactively manage your contractor assignments in partnership with your staffing vendor
- Work with a reputable and experienced staffing solutions firm, like the InSource Group, that understands your needs and values a good relationship.
Why Partner with the InSource Group?
We are passionate about making our clients successful. When you win, we win.
Our clients get full support from their business managers, recruiters and support staff.
From CEO to intern, we are all dedicated to exceeding your expectations.
With the InSource Group, you will always get direct communication, sound advice, a detailed staffing plan and uninterrupted administrative management of your team. By leveraging our expertise, you will be able to rapidly deploy staff when needed – and for the time needed – while reducing overall payroll, benefits and recruiting expenses.