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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.

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

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!

sgruenMitigating Co-Employment, Misclassification Risk for Independent Contractors

Hiring Efficiency Improved By Digitized Credentials

Communicating and collecting work histories, qualifications and achievements is a critical component to hiring efficiency. The delivery method for those details – a paper printout handed to an interviewer or a static electronic file emailed to a human resources department – went virtually unchanged for decades. Recently, however, a new mechanism has emerged.

The resume is dead. Long live the resume.

The concept of the employee CV isn’t going anywhere, of course. But in order to keep up with modernization, and with the aim of improving hiring efficiency and organization on both sides of the worker-employer relationship, it has had to change. Digitization has supercharged the ability of hiring departments to identify, vet and bring aboard new employees, while providing candidates with a dynamic platform to communicate their value to employers.

Consider the limitations of the traditional resume. Its shelf life is short and its flexibility nil, diminishing its usefulness. Particularly in the contractor economy, it’s an enormous hassle for employees to update a paper copy of their work history every time they work with a new client or add a competency to their skill set. The old ways also assured employers that they’d wind up spending inordinate amounts of time filing away and later combing through reams of outdated CVs. Digitization allows for changes to be made easily and instantly, and shared universally.

Resumes of the past, frankly, were also easy to fudge. Candidates would occasionally embellish and, every so often, outright falsify information. The burden of proof lay on hiring managers, who would be stuck verifying which details of a candidate’s resume were true, false or possibly just outdated – all with the clock ticking.

LinkedIn, for one, attempted to address some of these problems. A web platform that allowed users to quickly update their profile, and which linked to the pages of previous employers and affiliated organizations, offered more flexibility and a format that could help employers improve hiring efficiency. But even this model was open to misrepresentations and, for the most part, provided only the nuts and bolts of users’ work experiences and qualifications.

The next step in the evolution of the resume has been a quantum leap: PeopleCaddie. Company-focused and built on a dynamic closed-loop model that incentivizes both employee and employer to operate within its network, PeopleCaddie acts as a comparative and verifiable database of contractor candidates, removing the hiring guesswork for employers. As a third-party talent cloud that helps connect contractors with new gigs and rewards them for good work, while directing employers to the right workers for their projects, everyone is motivated to work together. That closed loop allows PeopleCaddie to confirm and maintain accurate employee records, while leveraging feedback from previous employers to help other network clients make their own smart hiring decisions.

Think of how other companies have used digitization to dust off and soup up an old model: Uber made standing in the rain to wait and hail a cab a thing of the past. Amazon allows you to shop from your bathtub and enjoy direct-to-door delivery. Recent shelter-at-home restrictions opened the door – or in this case a window – for Zoom to reimagine the traditional office meeting.

By harnessing the powers of digitization, it’s already been proven possible to bring similar innovation to the hiring process. With an elegant platform featuring a deep pool of contractors with updated and accurate work histories, comprehensive ratings and detailed reviews, a talent cloud like PeopleCaddie saves time, instills confidence and puts the right candidates at the fingertips of hiring managers.

Are you in need of contingent labor? Reach out to our team and get your job posted.

sgruenHiring Efficiency Improved By Digitized Credentials

Talent Cloud Advantageous for Seasonal, Project Work

Hiring is hard. Managers, human resources professionals and business leaders of all stripes understand the tedious nature of identifying, onboarding and retaining quality talent. For companies whose workforce needs ebb and flow along with the fluctuations of market demand, that challenge becomes doubly difficult. But there’s an emerging technology that is a boon to these businesses: the talent cloud is advantageous for seasonal and project-based work. 

To reduce expenses or to enable them to pursue additional revenue, more businesses are employing independent contractors to meet their seasonal and project-based needs, and the workforce continues to gradually warm to the gig economy. But this doesn’t make hiring any easier. In fact, the sheer number of candidates makes tracking and matching talent complicated, slow and prohibitively expensive for most HR departments.

Modern problems require cutting-edge solutions, which is why many businesses are turning to talent clouds to fill their staffing needs. Particularly for companies seeking candidates for seasonal, temporary and hard-to-fill positions, working with a talent cloud may be the most efficient, affordable and hassle-free way to hire.

Here’s why:

Match expenses to revenue. Every company should have at least one clear goal: optimize investment in a workforce to fit with the needs of the business. But in many industries, the work isn’t steady. Take tax accounting. Business heats up in January, when tax documents begin pouring in, and then peaks in April, when the deadline arrives for everyone to file with the IRS. But the demand for CPAs wanes from there, forcing accounting firms to make a choice: pay employees the same amount for less work or adjust the size of the workforce to align with the workload. When skilled contractors are available on demand through a talent cloud, that choice becomes a no-brainer.

Reliability. As previously mentioned, finding capable contractors is an enormous challenge. The antiquated practice of posting a job ad, identifying quality candidates, vetting, interviewing and hiring is as slow-moving and labor-intensive as it sounds. Over the years, it’s also been proven to be a hit-or-miss enterprise. At PeopleCaddie, for instance, our technology platform features a repository of proven, highly-skilled contract workers, matching them with specific client needs based on ideal fit, onboarding, payrolling, then keeping them connected going forward to minimize the friction associated with using a contractor again. A talent cloud helps a business find the right contractor and avoid any lag in production or workflow.

Ease. Any technological advent is designed to simplify a task, reduce labor or build in convenience. A talent cloud can do exactly that for most professional businesses. PeopleCaddie creates a turnkey relationship, identifying the best contractors for its clients, maintaining that customized labor pool on a digital platform and empowering employers to instantly add proven talent at the push of a button. A talent cloud handles both the front-end sourcing, vetting and the back-end processing of contractors, removing the guesswork for an HR manager and reducing tax and accounting paperwork. At PeopleCaddie, we also provide candidate reviews and ratings from previous employers and allow clients to stay connected to preferred contractors when they click with a company or bring unique talents to certain projects.

With talent clouds like PeopleCaddie, companies have no need to hunt for talent, no haggling over pay, no mountains of paperwork and no surprises. Clients get the contractors they need, for only the amount of time they need them, with none of the hoops-jumping or uncertainty that was once part and parcel to the hiring process.

If you believe that your company could benefit from PeopleCaddie’s talent cloud, please go to peoplecaddie.com to learn more or contact us.

sgruenTalent Cloud Advantageous for Seasonal, Project Work

How Contractors Can Get Paid Every Two Weeks

There was a time when you couldn’t hold a conversation about freelance work without a few key phrases popping up: “side hustle”, “supplementary income” and “temp work” come to mind. If you’re a full-time independent contractor, you’ve likely received your share of confused looks and worried glances from friends and family, along with some version of the usual question: “Wait, you want to do this?” Much the trepidation comes from the inconsistency of payment. Contractors are treated like vendors and have to wait on payment. But there’s an alternative wherein they enjoy the same, steady payment cycle as W-2 employees, and PeopleCaddie has developed a framework for how contractors can get paid every two weeks.

Our concept of contract work has changed dramatically in recent years. We’re now living in a freelance world, with an estimated 1.1 billion independent contractors making up more than a third of the global workforce – and it’s growing. As more workers in the U.S. and around the world embrace the gig economy, they aren’t blind to its pitfalls. Yet, even those are changing.

At PeopleCaddie, we aren’t just a staffing agency that sends our clients a bunch of resumes – we’re a conduit connecting independent contractors with the right companies and offering a no-hassle alternative to the traditional grind of gig work. The way we see it, it’s our business to provide contractors with all the benefits of freelancing while reducing or eliminating their most aching pain points.

Consider the typical freelancer-client transaction from the contractor’s perspective:

  • Create a vendor profile for every client, filling out and tracking paperwork each time a project begins with a new client
  • Submit an invoice for each project completed
  • Wait for confirmation from a client’s accounting department, sometimes trading emails or phone calls to ensure that an invoice is being processed
  • Often wait another 30-60 days for a check to be sent, as many companies follow a Net-60 policy for contractor payments
  • Gather documents from multiple clients for tax purposes at the end of every year

Paperwork will never not be a pain for freelancers, but PeopleCaddie significantly eases the usual frustrations by handling much of the heavy lifting for contractors. All transactions (and thus all paperwork) funneled through one central office, which is how contractors can get paid every two weeks. The advantage of receiving a steady, paycheck (direct deposit) – no matter when the client pays – is an enormous benefit.

And contractors aren’t the only beneficiaries. In addition to offering companies access to a wide network of skilled professionals, PeopleCaddie’s talent cloud helps them maintain their client-vendor relationships – often reconnecting the two parties – which helps businesses manage fluctuating labor needs, reduce training costs and time, and lighten the administrative burden by cutting down on the overall number of vendors used.

There are good reasons more workers are choosing to freelance: flexibility, variety, opportunity. Skip the commute. Work from home, in your space, at your own pace. See the world, working for nine months and traveling for three. Or cross borders through the work, signing on with bucket-list clients who would have been impossible to reach if not for the freelance economy. Even if your motivation for contract work is at a nuts-and-bolts level, a gig worker has inherent abilities that, collectively, feel like a superpower: find more opportunities while avoiding project burnout and diversifying an employment portfolio to optimize job security.

PeopleCaddie is glad to help contractors meet those goals. By teaming up with skilled vendors and working with good companies, we’re able to help freelancers take full advantage of an increasingly preferred freelance economy, achieve a healthy work-life balance and avoid many of the usual pitfalls and inconveniences of contract work.

Interested in a project on our jobs page? Contact us at [email protected].

sgruenHow Contractors Can Get Paid Every Two Weeks