freelance

All posts tagged freelance

Professional Staffing: The Possibilities Talent Clouds Offer

Professional staffing has always been a chore. The need to fill a professional staff role, no matter the position, triggers an exhaustive, often dreaded process: culling through stacks of resumes, identifying quality applicants, vetting the best candidates, scheduling and conducting interviews, and eventually making tough decisions that, after it’s all said and done, don’t always work out.

It’s a necessary burden: most companies need the muscle and institutional knowledge that comes with a full-time workforce. Still, many employers have the ability – and some might call it the luxury – of supplementing that staff with contract workers who offer, among other things, faster onboarding times and maximum flexibility. In fact, with the right partner – a proven third-party talent cloud – bringing aboard freelance talent can be one of the easiest aspects of a hiring manager’s job.

With a talent cloud, not only can the time and efforts of a human resources department be better focused on other duties, but the results of contingent-labor hiring and professional staffing are often more impressive. That’s because a talent cloud, like PeopleCaddie, focuses solely on contract workers, building networks of quality freelancers and sought-after employers, and, through intelligent technology, matching them in professional relationships that create the best fits for each.

Think of a talent cloud as a vending machine for professional staffing. It’s simple to use, and by building a vibrant and engaged online community, talent clouds build strong relationships with contractors. These relationships, ratings from previous employers, and the increasing scale of the online community offer a clear view of the best available freelancers and deliver a near-instant payoff. That speed is crucial. Companies are always chasing business, seeking the next opportunity, and they can’t afford to worry about whether their full-time staff is perfectly calibrated to take on new work. Having the flexibility to ramp up staff and quickly identify and hire skilled talent to fill specialized roles allows a business to meet whatever workforce needs that may arise based on new projects.

By alleviating the pressure point of modulating bandwidth, a talent cloud enables a company to not only scale up but also streamline at the close of seasonal work or after big projects wrap. One of the reasons employers have balked at new business or focused on slow growth in the past is to avoid workforce bloat during leaner moments. Instead of being on the hook to pay an exclusively full-time staff – not to mention laying out for insurance plans, 401ks, pensions – employers who supplement their workforce with a talent cloud can hire freelancers on contracts that align with the flow of business and, if necessary, make unforeseen adjustments on shorter timelines.

With PeopleCaddie, a company is always plugged into a network of carefully cultivated contractors and a platform that offers smart searching and sortability. Cutting through the clutter to get to your next hire – a pre-vetted, rated and reviewed freelancer with a transparent work history and skill set – puts a world of hiring possibilities in employers’ hands.

Find out how PeopleCaddie’s talent cloud works by clicking here.

Hiring Practices in 2021 Require Modernization

It’s no secret: The future of work differs materially from its past. Whereas workers once strived for steady employment and a secure pension – with “lifer” status at a single employer representing the brass ring – they now move fluidly (and willingly) from one company or gig to another, all of which challenges hiring practices today.

And there’s a flip side to that equation. Most large companies no longer boast a workforce made up solely of permanent, salaried employees. Today, full-time staff hires typically make up an organization’s core employee base, but the workforce is rounded out by part-time employees, temps, contractors and even remote freelancers. The corporate landscape has changed, and so too have the expectations of both employees and employers.

In the public accounting space, in particular, many large firms are increasingly turning to contingent labor to fill time-sensitive resource needs. For the employer, it’s a cost-control advantage: contractors are paid at an attractive rate, but the firm only pays them for billable hours – no salary, no benefits. In a seasonal industry, understanding the nature of contingent labor and its variable costs are critical to successfully leveraging this workforce and optimizing revenue.

Admittedly, that’s easier for larger firms. A more robust workforce, greater capital and internal systems that expedite the hiring process create more flexibility and better conditions to accommodate the ebbs and flows of seasonal labor needs. But in this environment, how can smaller firms compete? Here are some ways smaller firms can advance hiring practices in 2021:

Find recruiters that are experienced in hiring contractors

Recruiting for permanent positions tends to be very different from recruiting contractors. The resumes of contract workers indicate more movement and don’t always contain the quality cues that recruiters look for in good permanent candidates – such as long stints with employers and methodical career progression. Inexperienced recruiters who apply those standards to short-term contract roles won’t have much success. You’ll want to move fast – and because contracting typically moves quicker than permanent hiring – you’ll want recruiters who understand that working on your behalf.

Work only with industry-seasoned recruiters

Public accounting firms are always looking for specialized talent. Only internal human resource departments and agencies focused on the accounting industry, which understand and have their fingers on the pulse of the market, will be able to consistently deliver high-caliber talent when and where needed – particularly during audit and tax busy seasons, when the war for talent is most intense.

Enlist the services of a digital talent platform

The Big Four have created their own private talent clouds, such as Gignow and the Flexibility Talent Network, to efficiently tap into the contingent labor market, which has modernized their hiring practices. But few mid-sized and small accounting firms have the scale, capital and technological expertise to build and manage their own private talent clouds. That also requires focus and time to establish awareness and credibility within the highly-dynamic contractor community and to build strong relationships with a critical mass of desirable contractors.

Instead, these other firms should consider partnering with an existing talent cloud – one that is open to all employers and has already done the heavy lifting for them. Talent clouds such as PeopleCaddie have a demonstrable network of proven contractors and a track record for delivering. By building what amounts to a toll bridge to the freelance market, a talent cloud provides firms outside of the Big Four with the ability to meet their seasonal needs without having to overcommit to permanent hires or heavily invest in resources to recruit contractors themselves.

The upshot is developing a robust pipeline of contracts is critical. But more importantly, it takes specialized expertise and investment. Whether it’s an internal recruiter, traditional staffing agency, or PeopleCaddie’s talent cloud, it’s important to develop the capability to consistently deliver talent when it’s most needed.

Want to modernize your hiring practices? Check out how PeopleCaddie’s talent cloud works.

person hiring contractors for busy season

Hiring Contractors for Busy Season? A Step-by-Step Guide

For hiring managers at public accounting firms, there’s no challenge quite like managing busy season. Determining the workload, identifying shortfalls, scrambling to adequately staff engagements and adjusting in real time – it’s all part of the annual dance. But with a rock-solid plan and a few key resources (might we humbly suggest employing the services of a talent cloud that specializes in public accounting?), you won’t have to white-knuckle through the industry’s most stressful time of year. PeopleCaddie can facilitate hiring contractors who are a fit for your business while helping you prepare with a step-by-step guide to hiring contract resources for busy season:

Steps to Hiring Contractors for Busy Season

Complete demand forecasting and resource planning. Assess your upcoming client needs then take inventory of your existing workforce to identify resource gaps. Before hiring contractors to fill the gaps, are there any existing team members who can be redeployed?

Determine which partners, groups or teams will need contract resources. Consult with partners and team leaders to learn where your workforce falls short. Are the needs for full-time or part-time resources? How many hours will be required? You’ll ultimately have to determine the best allocation of contract resources, but be sure to take advantage of your leaders’ knowledge of their corner of your business.

Can these resources be sourced by your existing TA team? Do they have experience sourcing contractors? Often, internal HR teams are focused on filling open permanent reqs and don’t have the bandwidth to also focus on filling busy season contract needs. Additionally, recruiting for contractors is a different skill set than recruiting for permanent hires. If you are desirous of having your internal team take on the added responsibility of filling contract needs, make sure that they have both the bandwidth and experience to do so effectively. Busy season is riding on their success.

Will contractors be on-site or remote? This will determine where potential contractors can reside – it may be easier to find a resource when not limited to a small geographic area. It may also influence which contractors are interested in your roles, as some contractors are only interested in remote opportunities. The worksite will also be a factor in terms of employee interactions, work models and even logistics around current COVID regulations.

Determine acceptable bill rates by business unit, practice area or group and seniority level. Even if there’s some leeway in your budget, you’ll want to set certain guidelines. Understanding bill rate ranges is incredibly important, as it will allow your recruiters and/or selected vendor(s) to determine the compensation rates that can be offered to candidates at each seniority level. In a hyper-competitive market for top talent, compensation is critically important to being able to secure desirable resources.

Determine how available contract talent will be shared across the organization and how hiring decisions will be made quickly, as highly desirable talent doesn’t stay on the market for long. Have a plan in place to execute hiring and staffing efficiently. Don’t miss out on the best talent or risk staffing lags that adversely affect productivity.

Engage a partner (talent cloud or agency) to assist you as needed. If you haven’t previously engaged in hiring contractors, make sure you choose a partner with a proven ability to deliver, including assisting with all aspects of the contracting process – from onboarding to offboarding.

Prepare workspace, equipment, security access, IT platform access, time management process, communications, etc., as required to be able to support contractors. If you aren’t proactive and deliberate about these logistics, you’ll wind up with new contractors twiddling their thumbs, uncertain who reports to whom, work getting backlogged and regret over the waste of time and resources.

Move quickly before all of the good talent gets locked up by other firms. Top contractors can take their pick of available roles. Be sure you’ve done everything in your power to position your firm to win the war for this coveted talent. If managed correctly, you can avoid having to settle for second-tier players, burning out your team because of staffing shortages, or opening the door to competitors because you have to decline engagements during busy season.

Looking to hire contractors for busy season? Reach out to our team to see how PeopleCaddie’s talent cloud can help.

Accounting Busy Season Provides Opportunity For Contractors

There’s never a bad time to think about your career goals, your professional path, and whether those two things align. A regular assessment of your current role, projects, and potential opportunities isn’t just appropriate – it’s the key to opening new doors and maintaining forward momentum in your career. This is especially true as we approach the accounting busy season, when many employers require supplemental and temporary labor to meet their seasonal needs, and when an array of opportunities present themselves to contractors seeking a new challenge or a firm foothold for their next step.

Not sure if you’re ready for it just yet? If nothing else, think of the upcoming accounting busy season as a chance for you to test the waters. In addition to potentially increasing your level of income, a short-term contract role could be used to help you achieve – or begin reaching for – those long-term goals.

Contracting for Busy Season

Ask yourself: Could a contract role help you transition from one function or competency to another? Are you a public accountant with an interest in investment banking – a notoriously competitive space? Maybe your current role is confined to external auditing but you have an interest in exploring work on internal audits. A contract role could jump-start your transition.

Have you had trouble getting a foot in the door with a desirable employer? During the busy season, many high-profile firms suddenly have a need for contract workers who can capitalize on that experience and exposure to make an impression. A contract role may be precisely the opening you need.

Make a Move

It could be that you have other reasons for considering a move. For instance, as the public potentially faces a new wave of the pandemic, you have significant concerns about returning to the office, which your employer has deemed mandatory. A short-term contract allows for a quick transition to a more flexible employer, a continuation of remote work, and a chance to test the waters in a new role.

Level Up

Perhaps there’s a particular skill or credential that you’d like to add to your profile? Your options may be more limited in fulfilling those goals throughout much of the year, but employers’ needs during the busy season offer unique opportunities to stock your professional toolbox. A contract assignment could be the way.

Beyond career development, there’s the practical side of gig work to consider. Are there busy season opportunities that could lead to meaningful annual assignments, preventing you from having to constantly scramble to find new clients? As an independent contractor, it’s always wise to think about clients interested in making use of your services on a recurring basis.

Whether you’re content in your current role or searching for a new one at this moment, consider bookmarking the accounting busy season for an annual professional inventory. It’s typically the best time to try grabbing that next rung on the ladder – or to simply make a change that is right for you.

Looking for contract work? Join PeopleCaddie’s talent cloud to start finding assignments today.

Labor Scarcity Hurting Workflow? Hire a Contractor While You Search

Too much business is a good problem for any company to have – but it is a problem. How does the work get done when your team is already at maximum capacity? Hiring permanent talent can be difficult in any market environment, but the process is positively brutal during a period of labor scarcity as dramatic as our current one. Identifying and vetting candidates then onboarding a new employee takes an increasingly inordinate amount of time – and that translates to lost business opportunities for your company. But as a hiring manager, you have options.

The most compelling among them: hire a contractor. Staffing up with permanent employees is a slog, but a contract employee can sometimes be brought on board in as little as a day – especially when that hiring is put in the hands of a talent cloud. By filling long-term roles with short-term solutions, you’ve addressed the most time-sensitive issue: your company has filled an immediate need that was causing pain and/or leading to lost revenue.

Shifting the burden of the extra workload caused by labor scarcity on existing staff is neither ethical nor wise. An employee who is expected to pick up the slack when the organization is understaffed may become resentful. They’re also on a path to being some other company’s employee. Particularly in today’s job market, a good employee doesn’t have to put up with burnout or the indifference of an employer. And let’s face it: The last thing you need in this environment is more attrition.

The added benefit of a talent cloud is the ability to engage highly-skilled contractors who may have provided work for your company (or others like it) in the past. Even when hiring a full-timer, there can be a lag between their first day and the moment when they’re operating at peak performance in your organization. Imagine learning of a hiring need, filling it quickly with a contractor who knows your business backwards and forward, then turning your attention to finding the best long-term solution. No blip in production levels. Total peace of mind.

Perhaps you’re matched with a contractor who hasn’t worked for your company before. Because a talent cloud pools the best contractors and helps build their skill sets with appropriate projects, you may land not only an ideal temporary fix but someone who morphs into a gem of a long-term associate. There’s nothing that says a human resources department is required to contract-to-hire – but there’s nothing that says they can’t either.

Think of a talent cloud as a technologically-advanced staffing firm with both the power to provide a solution to your company’s short-term hiring needs and the potential to deliver the perfect long-term solution for your team. The digital hiring revolution has arrived.

Interested in learning more about PeopleCaddie’s talent cloud? Click here to watch a short video on how it can help you overcome labor scarcity.

Contracting Shouldn’t Be Fear-Filled

So you’ve reached the end of the line. For whatever reason, you’ve decided that you’re finished with the full-time professional grind. It’s time to make a go of the contracting life, to start enjoying all the flexibility and benefits contract work has to offer. You’re ready to be your own boss, make your own schedule. Time to take the plunge. Only one problem:

You’re freaking out.

It’s a significant transition leaping from a structured, one-to-one employment relationship to a world in which you’re management, marketing agency, human resources and the IT guy – and all before you ever lift a finger for the work you’ve actually been hired to do. You have questions, concerns, anxieties. Maybe you’re no-bones-about-it terrified. The good news: you’re not alone. Most every former staff employee went through the same range of emotions before venturing out as a contractor. How, then, do you go about overcoming that initial fear of contracting?

Start by entering into contract work with a comprehensive plan. You won’t get far flying blind, and the more variables you address in advance will give you the peace of mind in your career as a contractor to successfully see it through. Here’s what to consider:

Rates. You’ll want to have a solid idea what the going rate is for a contractor with your skill set and experience. If you have expertise that’s in high demand or simply have a salary expectation in mind, you can adjust accordingly. Just keep in mind: pricing your services competitively is key to consistently drawing the interest from multiple clients that will keep you busy with work.

Preparation. As much as possible, contractors should be ready to hit the ground running when starting a new contract. Many employers pay top dollar for highly-skilled workers, so you should try to maintain the mindset of going above and beyond, overdelivering on a daily basis through the duration of a project. Be prepared to learn a company’s technology quickly, as well as any important protocols or best practices that may be unique to a business.

Relationships. Forge a strong relationship with the right staffing agency for yourself and your career. This can be instrumental in securing proprietary opportunities – often ones that other contractors will never know even existed. What’s more, agencies have relationships with clients who will trust them when they vouch for your skills, integrity, work history and ability to perform in a given role.

Focus. Think about the companies you’d like to learn from and the sort of work you’d like to be doing. Where will you make valuable contacts and pick up new competencies you can’t get elsewhere? Be deliberate about the contracts you choose and the agencies you choose to partner with on your contracting journey. Done correctly, contracting opportunities offer autonomy over your career, with more flexibility, pay and growth options as you get more contracts under your belt.

These are just a few of the considerations you’ll want to give some thought to before making the leap from perm to contracting. Not only can you overcome the apprehension that comes with any new and unfamiliar experience, but by creating a plan and carefully thinking through your objectives in advance, you’ll be able to land more of the projects that interest you, gain experience with desirable clients and keep developing a toolbox of skills that will help position you for more attractive contract work and better rates in the future.

With PeopleCaddie, it’s easy to make the leap to contract work. Check out our jobs page!

Talent Shortage Staffing Best Practices

Much of the news about the hiring market these days focuses on the pandemic and the slow return of workers to the labor force, but many of the positions at the heart of those conversations are found at entry levels and within sectors like the service industry. The irony for employers on the hunt for skilled labor is that they have been grappling with a talent shortage for years.

According to a ManpowerGroup study released before last year’s COVID shutdown, global talent shortages had almost doubled in the previous decade. Research indicated that 54 percent of companies reported skills shortages, with the United States (69 percent) reporting the most acute shortage of 44 countries surveyed.

The truth is, this development shouldn’t catch anyone off guard. As new technologies emerge, more specialized education, training and expertise is required. In fact, those rising shortage numbers figure to remain on an upward trajectory for the near future.

“In an increasingly tech-enabled world, people with skills are in demand,” said Jonas Prising, ManpowerGroup chairman and CEO, in a statement about the study.

As a hiring manager, you have more tools than you might think for tracking down and bringing aboard qualified personnel during a talent shortage. By turning to contract employees, it’s possible to fill temporary gaps, hire quickly and tap into a pipeline of specialized workers without committing to long-term relationships that could lead to bloat or overstaffing as your company’s needs change.

More workers than ever before indicate a preference for contracting, which means your business isn’t limited to the shallow end of the talent pool. And even in the midst of a talent shortage, there are ways to make your company and the roles you’re offering more attractive. Consider:

Higher pay: This almost goes without saying, but it’s important to remember your cost savings in a contract relationship (insurance, 401k, etc.) and weigh it against the urgency and duration of your need. You might ask yourself: “Can I afford to pay a contractor an above-market rate for a highly-skilled role on a three-month project?” If so, ask yourself this: “Can I afford not to?”

Flexible work: Some workers value the ability to work remotely so highly that they will accept higher employment risk in return. Even for positions that traditionally require an in-office presence, perhaps a day or two of work from home might be allowed as an hiring incentive. Contract workers also typically enjoy extended breaks between assignments, allowing them to take care-free vacations without having to think about the work piling up on their desks while they are gone.

Training and skills development: Some companies are connected to professional-growth programs that could help sway a contract worker weighing an offer. “We know from conversations with candidates, clients and from our data that workers want flexibility and the opportunity to learn new skills,” Prising said. “As the pace of disruption accelerates, helping people adapt for future jobs and companies becoming creators of talent has never been more important.”

Some skilled workers won’t settle for less than full-time, salaried employment – and that’s OK. Your workforce should consist of a percentage of staff employees, which bring stability and proprietary knowledge to your company while giving contract workers who are interested in permanent work something to aspire to.

The number of contractors you’ll require will be dictated by the unique needs of your company at any given time. But by opening up your job search to the contract workforce, you can ensure that you’ll have the flexibility to meet those needs without overcommitting to staff in the future – while at the same time leaving no stone unturned in the search for elusive talent.

Short on talent? See how our talent cloud works here.

Contingent Labor Is Having Its Moment – and It’s Not Going Away

Industry is evolving. And as the fundamental nature of business has changed in recent years, the makeup of the workforce has had to change, with more of an emphasis on contingent labor.

An economy once based on industrialization, mass production of goods and high-volume labor has transitioned into a data- and professional-services-based economy, one that is more reliant on specialized, project and temporary work. Naturally, an influx of freelancers, contractors and consultants into the workforce has followed. There’s no doubt contingent labor is currently having a moment – but it also appears to be here to stay.

The rising contingent labor trend grew into a full-blown movement during the pandemic, which drove many former “traditional perm” workers to seek alternative employment or convinced them it was time to finally give freelancing a try. Forty percent of the American workforce today is made up of contingent labor, according to the U.S. Government Accountability Office, and one estimate suggests that half of the working population in this country will be freelancing by 2027.

Yet how we arrived here isn’t as important as whether the new paradigm is working. The consensus: a resounding “yes,” on both sides. Employees who had grown weary of office life, the daily commute and grappling with child-care logistics have embraced contract work wholeheartedly. Others who were initially less certain of its merits have learned how the flexibility of freelancing has improved their work-life balance. A recent Upwork study found that 60 percent of freelancers said no amount of money would convince them to take a traditional job, even after the pandemic ends.

At the same time, more employers who previously had resisted contingent labor are discovering that it can be a sort of skeleton key to productivity, with lower associated cost and far higher flexibility than hiring a full-timer outright. It is, however, the best bridge to a staff position, offering employers the ability to gauge a contractor’s skills and cultural fit prior to assuming the additional risk of extending an offer for permanent employment.

The macro need for contract work isn’t cyclical, making it one of the most recession-proof areas of HR. Whether pre- or post-pandemic, no matter the ebbs and flows of the economy, contingent labor will be in demand. And with the stigma of freelance work having nearly evaporated, more employees are not only accepting – but will expect – contract opportunities from companies of all stripes. Even if contingent labor weren’t the most efficient means for generating margin from a workforce (though, to be clear, it is), gig work is being sought out by more employees than ever. A professional relationship that registers as a win for both management and labor will continue to have a lasting – and growing – presence across every industry.

Interested in using PeopleCaddie to source your next contingent need? Check out our jobs page where your company can feature an opportunity.

Talent Cloud Breathing Life Back Into References

Identifying the perfect on-paper candidate for any role is a critical step in the hiring process. Of course, it’s just the first one. The trickier maneuver for a hiring manager is often background verification. Why? Because that piece of paper describing a potential hire – the traditional resume – is designed to tell employers exactly what they want to hear. Candidates will always look for a leg up in the hiring race, so it makes sense that any employee-created profile would paint that candidate in the most favorable light. Sometimes even embellish. Occasionally, outright falsify. Vetting that profile, following up on a candidate’s job references and confirming resume claims is all part of the process for a hiring manager. But a talent cloud makes that process easier and more reliable.

PeopleCaddie is already a step ahead, having already developed that technology. A third-party talent cloud that manages candidate profiles, employment history and job references, PeopleCaddie doesn’t just take the heavy lifting off the shoulders of a human resources department – it also delivers more accurate and valuable information about job candidates in a fraction of the usual time.

Consider the usual slog through a pile of resumes. Even after exhaustively reviewing each profile and plucking the best candidates from the stack, there’s still the matter of confirming credentials, lining up phone calls and having conversations with other busy professionals – some of them even competitors – who aren’t necessarily ready to speak cogently and in thoughtful detail about an employee who is no longer with the company, if their company policy doesn’t prohibit them from saying anything at all.

A talent cloud cuts through this laborious ritual, soliciting employee ratings and reviews from a comprehensive list of past employers, completed on their time. The design is superior to previous job reference practices because it ensures a higher quality and quantity of information, along with a level of credibility – as information provided by the candidate can quickly be digitally cross-referenced –- that can’t be assured through a traditional resume.

Imagine hearing opinions from every previous manager of a contractor, not just the former employers a candidate has shared as contacts in their resume. As a hiring manager, you’re looking for the full scope of a candidate’s experiences – good, bad and in between. What are the common themes that can be found across multiple reviews? Which skills or characteristics are mentioned most often? In the same way a diner can use Yelp to learn about a restaurant’s food, customer service, prices and more, a hiring manager can get a quick read on a contractor or drill down for more granular information, gathered by invested reviewers.

And, yes – these reviewers are invested. Because a talent cloud like PeopleCaddie is a shared candidate pool, it’s in the best interests of employers to be considerate, honest and thorough in their reviews, with the expectation that others will be as well. Crowdfunded employer opinions offer a far wider range of feedback than the average resume, and the information they provide is often more incisive. Think about it: What could be more telling than an open-ended review from a former supervisor, with no agenda beyond contributing to the robustness of a shared talent cloud?

Hiring managers don’t always know the best questions to ask a former employer about a candidate, nor do they have much time during a quick phone call to probe for more revealing details. PeopleCaddie incentivizes employers to be purposeful in their reviews of former contractors, cutting directly to what they perceive to be key information. They can highlight pertinent strengths and weaknesses and include important project work. No awkward phone call, no on-the-spot conversation. Just the flexibility of time and benefit of the written word to ensure a mindful, complete review.

A talent cloud doesn’t make the hire – and that’s as it should be. Ultimately, you’re the best judge of a candidate for a role at your company. But by empowering a hiring manager with smarter, more comprehensive contractor information, a partner like PeopleCaddie can supercharge the quality and speed of your decision-making process while bringing you the peace of mind that you’re always connected to the best contractors available.

Interested in learning more about the PeopleCaddie talent cloud? Contact us!

Mitigating Co-Employment, Misclassification Risk for Independent Contractors

Hiring the right employee at the right time, a candidate who qualifies as the right fit for a role and within a company culture, is a challenge. Meeting that challenge again and again is a skill. As a hiring manager, though, it’s possible to identify and bring aboard the best independent contractors for your company and still miss one key final step.

The appropriate classification of newly hired independent contractors is a crucial action that sometimes gets taken for granted. Laws classifying employees with W-2 or 1099 designations are nuanced and highly-specific, and a failure to grasp those details could land a company in hot water. One of the best ways to mitigate that risk is for a company to enter into a co-employment relationship with a third-party contractor agency.

Consider that the IRS maintains a 20-point checklist providing guidelines on whether an independent contractor should be paid on a W-2 or a 1099, but it’s up to the employer to make the determination of how its new hires will be paid according to the tax code. A misclassified employee can file a complaint against their employer demanding to be compensated for paid time off (PTO), healthcare benefits, 401k contributions and other considerations.

The financial risks for a company that misclassifies a new hire as a 1099 employee include back-tax assessments and fines – even penalties amounting to as much as 100 percent of the back taxes due at both the federal and state levels. Those back taxes may include all federal income taxes, all social security taxes and all unemployment insurance taxes not withheld.

Those are no small considerations for a busy HR department responsible for maintaining a high-flow pipeline of contractor talent. Any company that relies on a regular influx of specialized or project labor should strongly consider the downside of a classification error – and the risk mitigation provided by working with a hiring agency or a talent cloud such as PeopleCaddie.

In a co-employment relationship where an employer hires independent contractors through a third-party employer, misclassification risks are dramatically reduced. Not only is the third party often better equipped to assess new hires under the classification laws, but as the employer of record, they are also responsible for ensuring compliance with all federal, state and local employment laws. A hiring department that uses a service such as PeopleCaddie can focus on the quality and fit of contractor candidates rather than the red tape typically involved in the hiring process.

A co-employment relationship with a third-party hiring agency not only offers numerous advantages in terms of finding and evaluating freelance talent – it has the added benefit of mitigating the risk of contractor misclassification. With the right co-employment partner, you can make the hiring process simpler, sidestep any confusion about W-2 and 1099 designations and avoid putting your company’s financials – and your own reputation – on the line.

Interest to learn more about how PeopleCaddie can help mitigate misclassification risk? Contact us!