Temporary Workers – The Value Proposition for Employers

Written by Joanna Morrow

Joanna Morrow, Principal and Founder of Employer Benefits & Advice, is an employer consultant and advocate who has worked in the employee benefits industry for over two decades. She works diligently to help employers overcome obstacles in their business by sharing her expertise in Human Resources, Benefits & Compensation, Process Mapping, Risk Management and ERISA/DOL/IRS compliance. She is a licensed life and health insurance professional in the State of Arizona and is an active member of the National Association of Health Underwriters (NAHU).

Temporary Workers – The Value Proposition for Employers

If you’ve ever sat down to watch an entire season of House of Cards on Netflix then you appreciate the value of being able to access movies and TV whenever you choose without having to commit to a scheduled time. For today’s employer, temporary, or contingent workers offer a similar value by offering an “on demand” workforce.

Today, highly skilled professionals such as CFO’s, Marketing Managers, and even Attorneys help make up the almost 41% of the American workforce now employed as contingent workers.

Check out this award winning, 2 minute clip that illustrates how the American workforce is changing.

Advantages of Employing Contingent Workers

  • Because contingent workers are less expensive in terms of salary and don’t usually receive benefits, hiring short-term workers can be a sizeable cost-saver for an organization.
  • Staffing is much more flexible for an organization when employing contingent workers due to the ability to hire and let go of new staff quickly and with few consequences. Because contingent workers do not expect a long-term relationship with their employer, there is a lot less harm done to those workers than there would be if the organization were to let go of a core employee.
  • Working with a temporary employment agency can greatly increase your potential labor pool, can help you find contingent workers with specific skill sets and may assist with any administrative requirements.
  • During times of economic stress, contingent workers can provide a “buffer” for an organization. In the event of layoffs, contingent workers can be let go before affecting the jobs of core employees.
  • Hiring contingent workers can be especially helpful when organizations are looking for people with specific skill sets not currently available in core employees. This frequently occurs when a contract or subcontract employee is hired for a short-term project that requires specialized knowledge.

Classifying Contingent Employees

Contingent employees can be characterized as temporary employees — they are not full-time and once their project is finished, they are gone. There are important legal and practical considerations that employers must understand before benefiting from employing contingent workers.

For example, you don’t want to hire an independent contractor as a 1099 worker, not pay employment taxes on that individual, and then have the IRS and the Fair Labor Board rule the person was in fact a full-time employee. If such misreporting is adjudicated, the fines and back taxes assessed could be significant.

Hire A Staffing Agency

When it comes to navigating the world of contingent employees a staffing agency is often the most efficient avenue for corporations seeking assistance and looking to mitigate risk. A staffing agency will:

  1. Assist in recruiting the most qualified candidate for your position
  2. Ensure the candidate’s contract contains language that protects you from the candidate terminating his employment mid-project (a common risk with temporary contract employees)
  3. Employ the candidate on their payroll as a W2 employee

For additional guidance or questions on how to hire contingent workers the right way, contact Joanna Morrow at 602-903-4047.