Has your firm backed away from its contract staffing services due to the hassle and financial and legal liability that comes with it? If so, you are NOT alone. But it might surprise you to know that some recruiters who had abandoned their contract staffing services are now returning to contracting.
These recruiters have found that they can get all of the benefits of contract staffing (steady income source, increased sales, becoming a sole-source provider to clients, etc.) WITHOUT the additional task and liabilities that come with employing the contractors.
That’s what Network Member Jeri Bartunek is doing. For 20 years, her firm, Bartunek Group Global Recruiting, did nothing but contract placements. Although she says that contract staffing was a “fabulous revenue stream,” she stopped offering that service when she was burned by a client during the recession. As the employer of her contractors, she was responsible for the payroll processing AND funding.
In short, she paid the contractors before she got paid by the end client. That was all well and good until a client didn’t have the ability to pay their $80,000 tab. That’s when Bartunek decided to shift her firm’s focus to direct hire, which they have done exclusively for the past several years.
Bartunek recently decided to re-establish the firm’s contract staffing services. So what happened? Did employing contractors suddenly get less risky? Did she have a guarantee that her clients would always pay? No. She simply became aware of the option to outsource the employment of her contractors to a contract staffing back-office service.
As the legal employer of her contractors, the back-office service is responsible for the payroll processing and funding, as well as all of the collections and other administrative tasks, including legal contracts, employment paperwork, background checks, unemployment, Workers’ Compensation, benefits administration, etc.
“With direct hire, it’s really great to get that big check, but with contract staffing, there is a ton of opportunity and a constant revenue stream that you don’t have with direct hire,” Bartunek said.
Meanwhile, for Network Member Scott Leishman and his firm, bizjobz, it was the “administrative nightmare” of running their own back-office that drew them away from contract staffing.
For starters, there was the liability insurance his firm had to obtain, and each client wanted to see different coverages on the firm’s Certificate of Insurance. Then there was unemployment and Workers’ Compensation—both filing claims and fighting them. The firm has not run any contractors out of its own back-office in two years, but they still have to administer claims on some former employees.
Realizing they were leaving money on the table by not offering contractors, Leishman sought a way to get back into the contract staffing game. Like Bartunek, he found the answer in outsourcing the employment of his contractors to a contract staffing back-office.
He is once again making contract placements—without the administrative nightmares.
“We are back in contract staffing because of the back-office service,” said Leishman. “We wanted to to be a full-range office. We are able to take care of the clients and candidates whether they prefer contract or direct.”
If you want to be able to solve ALL of your clients’ staffing problems, you have to provide contract staffing services. But you don’t have to take on all the liability and administrative hassles.
Let a contract staffing back-office provider do that for you so you can continue to do what you do best . . . recruit!