As the demand for independent talent grows, many organizations are using their own resources to directly source top independent talent without engaging third-party staffing agencies or consulting firms to perform recruiting functions. Direct sourcing affords many economic benefits such as avoiding high-priced staffing markups, decreasing overhead costs by hiring fewer full-time employees and filling project-specific roles with the right-priced independent talent.
But direct sourcing is only a small part of the picture. In order to compliantly utilize independent talent end-to-end, organizations must build a Direct Access program that encompasses finding, sourcing, engaging, paying and managing independent workers. Here are five best practices organizations should keep in mind when creating a Direct Access program to source and engage independent professional talent.
1. Drive Support from the Top Down
A lasting and successful Direct Access program begins with the right leadership support and sponsorship. This support must be driven from the top down by a senior business leader who has influence over the managers who will be sourcing and utilizing independent talent.
While a top-down approach is not the only method, attempting to build a Direct Access program from the bottom up is almost always a long and arduous path. Internal adoption is much slower and disjointed as the process relies on word of mouth and proof-of-concept in small groups.
Engaging with independent contractors (ICs) is a very productive and cost effective way to work smart in your business. As more companies implement contingent worker programs as part of their overall business strategy, it's important to make sure that you as a company are protected from issues beyond the proper individual IC classification of your contractor talent. Many articles have been written about IC compliance, and the aim of these less obvious recommendations will help ensure your contractor talent program is successful and fully compliant. 1. Make sure your company understands the importance around proper IC classification and the Affordable Care Act (ACA). As a company, it's essential to have a clear IC compliance process in place to provide protection from possible issues regarding health coverage and other benefits responsibilities.
Mark Young, Senior Vice President, Human Capital Practice, Synergy Services
Mergers and acquisitions (M&A) trends are growing on a global scale, and the benefits are many. M&A create cost efficiencies through economies of scale and also lead to tax gains. They often increase revenues and can reduce cost of capital. And while the benefits of M&A are significant to businesses, there is often an overlooked factor that can potentially collapse the upsides to these benefits. As M&A continue to trend upward, so does the contingent worker population. According to the Bureau of Labor Statistics (BLS) the total number of flexible workers exceeded 2.6 million in late 2013 with projected growth to continue full steam in the coming years. Contingent labor growth is a direct result of the changing overall workforce landscape, and companies are making considerable investments in their contingent workforces to reduce costs and remain nimble. To that extent it's important to recognize that during a merger between companies, independent contractor (IC) liability is often times overlooked. This "hidden exposure" can be devastating to any company as state and federal agencies are increasing their efforts to uncover unknown ICs and penalize the companies responsible for misclassifying these workers. Individual states are also establishing harsh consequences as IC misclassification continues to be a growing problem, and ICs themselves are becoming empowered with information on how to secure their rights as an independent business. Ultimately the acquiring company inherits the ICs as well as the risk associated with those IC engagements. Because the level of IC validation (if any) with the selling company is unknown, it's critical to include discovery of the IC population as a part of the overall M&A due diligence process.
Dan Evanoff, Director of Compliance, Synergy Services