In today’s economic environment everyone is looking for ways to operate more efficiently. Clients often have staffing needs or problems, and direct hire is not always the answer. You can provide alternative staffing solutions that allow clients to save money and enhance flexibility, and you can do so without adding to your staff or increasing costs. Let’s look at these alternative staffing solutions:
1. Traditional Contract Staffing
This is what usually comes to mind when someone mentions contract staffing. Just as with direct hire, the recruiter gets the job order, locates the candidate, and negotiates rates. Every contract placement has a multitude of administrative, legal and financial tasks like creating and negotiating client and candidate contracts, payroll funding and processing, workers’ compensation, unemployment, timesheet collection and tracking, background checks, contractor benefits, invoicing and collections, etc. But you can outsource these tasks to a contract staffing back-office. The backoffice becomes the legal employer of the contractors, and you do not have to deal with any of these tasks. Plus you could start doing contracting with zero ramp-up time.
2. Contract-to-Hire Conversions
In this scenario, the candidate is placed on a contract assignment with the intention that they will be converted to a direct hire in six to 12 months. This allows the client to ensure the candidate is a good fit for the job before making the direct hire commitment. The beauty is that you receive your hourly profit for every hour the contractor works, and you receive a conversion fee when the contractor is converted to a direct hire. On a side note, you should include conversion fee language in all of your client contracts, even if the client is not intending to convert the contractor. The company’s plans could change, so the conversion fee should be clearly documented. You can request sample conversion fee language here.
3. Payrolling For Non-Recruited Candidates
Occasionally, a client may find their own candidate, but they only have a short-term need (3-12 months), so they want to make the worker a contractor. Instead of putting the contractor on their own payroll, they want a third-party to employ the worker and assume responsibility for the employment tasks. Clients like this scenario because they do not have to deal with unemployment, taxes, insurance, benefits, etc. When the short-term need is met, they simply end the assignment.
4. 1099 to W-2 Conversions
The Obama administration has been cracking down on companies that incorrectly classify workers as 1099 independent contractors (ICs) instead of W-2 employees. The government is losing millions of tax dollars every year, and it’s not happy about it. You can educate clients on the penalties and financial hazards of incorrectly classifying workers. You can also help by converting their 1099 ICs to W-2 employees, and outsourcing their employment to a contract staffing back-office.
5. Retiree Re-Staffing
Baby Boomers are reaching retirement age, and many companies fear a mass exodus of their most experienced workers. The good news is that many Boomers aren’t ready to completely leave the workforce. Contract staffing appeals to them because it provides flexibility so they can spend more time with family and on hobbies, with the added bonus of more income. Meanwhile, companies are able to retain or gain the skills and experience of a retired worker.
6. Internships/Co-ops
Internships are a vital way for college students and graduates to gain real-world experience, and it also helps companies get affordable help. The potential problem comes in when those internships are unpaid. Under the Fair Labor Standards Act (FLSA), legally unpaid internships must meet six criteria, which can be found here. If there is a need for paid internships or co-op programs, you can offer that service to your clients and simply outsource the legal employer responsibility to a back-office service.
By providing these options to your clients, you become a valued partner that they can trust to provide the best solutions to their unique staffing challenges. Plus you will earn money for every hour the contractors work!