Can You Get Started Quickly in Contract Staffing?
Recently, I wrote an article about how recruiters can get started in contract staffing. In that article, I outlined three specific ways recruiters can do so. Now we turn our attention to the subject of speed. Specifically, how quickly can you get started in contract staffing?
When it comes to contract staffing, the mechanics of getting a job order and finding a candidate are the same as making direct placements. What’s different about contract staffing is that you must have a back-office to handle the legal, financial, and administrative issues.
You have two options for a back-office: outsourcing it or doing it in-house. Let’s examine the differences between these two methods for getting started in contract staffing.
Outsourcing: the express method of contract staffing
You can outsource the back-office tasks to a contract staffing back-office. This back-office will become the legal W-2 employer of record for your contractors. A quality back-office should already be set up to employ all of your contractors.
If you select Top Echelon Contracting, there is NO enrollment process for recruiters. As a result, you can literally go from a 100% direct hire recruiter to one who can also place contractors in a matter of hours, not months.
In-house back-office: the slow boat with contract staffing
If you plan to run your own back-office, you should expect the ramp-up process to take at least one to three months. This is due to all of the tasks you must complete to become the employer of record for your contractors. These tasks include:
- Getting a line of credit to fund your payrolls
- Getting sufficient liability insurance, as you will be required by most clients to show a valid certificate of insurance
- Deciding how you are going to process payroll (in-house or outsource) and getting that set up
- Registering to withhold state, city, and local income taxes in all of the required jurisdictions
- Getting set up to do the required withholdings, deposits, and filings
- Registering for unemployment, Workers’ Compensation, and disability insurance, if applicable, in each of the states in which you will have contractors
- Setting up a method to provide contractors with paid leave/sick time if required in the states where you will have contractors
- Finding an insurance company that can provide coverage in each state where you will have contractors
This is just a small sampling of all the tasks that must be completed before you can place contractors. Visit the Top Echelon Contracting website for additional information.
Which method will you choose?
This list is tailored to recruiters who are already doing contracting and want to expand outside of their home state. However, most of the steps also apply to direct hire recruiters who are just adding contract staffing to their business models.
You can see from our small sampling above how time-consuming and complicated running your own back-office can be. So it’s up to you.
Do you want to take the express method or the slow boat to contract staffing?