(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

For various reasons, some workers prefer to be paid on 1099 instead of a W-2.  But it’s not the worker’s decision.  The IRS guidelines determine whether a worker is classified as a 1099 independent contractor or a W-2 employee.

Still, recruiters and their clients often get pushback when trying to convince their candidates that they need to be paid as a W-2 employee rather than a 1099 independent contractor.  So how do you convince them that they need to be paid on W-2?

For starters, you may want to point out the risks.  Independent Contractor misclassification audits have increased on both the federal and state levels over the past few years.  There has been a lot of focus on how this affects companies, but workers can also be subject to audits.  If it’s found they’ve been misclassified, they could be required to file amended tax returns, which could result in additional taxes and penalties.

Plus, there are many advantages to being classified as a W-2 employee.  By being a W-2 employee, workers will:

• Receive a weekly paycheck with the option of direct deposit
• Have access to medical insurance, vision, dental, and life insurance
• Have access to a 401(k) plan
• Be eligible for unemployment insurance
• Be covered under the employer’s Workers’ Compensation plan
• Not have to negotiate and/or write a client contract
• Not have to generate invoices to the client
• Not have to handle collection issues with the client
• Not have to float expenses while waiting on payment from the client
• Not have to do their own quarterly tax filings
• Have half of the Social Security Tax paid by the employer
• Have half of the Medicare Tax paid by the employer

By pointing out the risks of being classified as an independent contractor and the advantages of being paid on a W-2, you can convince even the most reluctant candidate that being properly classified is in their best interest.

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888.627.3678
DFledderjohann@TopEchelonContracting.com
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

You probably already know how hot technology hiring is right now.  Well, according to The Wall Street Journal, some of the hottest tech companies are also clamoring for interns, in additional to full-time hires.

Tech companies, ranging from start-ups to household names, are expanding their internship programs, including the following:

• Dropbox—Plans to hire 30 engineering interns
• Google—Hired 1,000 engineering interns this past summer
• Klout
• Twitter
• Facebook—Plans to hire 625 interns for this summer

Why the sudden surge in interns?  Internships allow these companies to get a jump on young talent—some internship programs even target high school students.

More importantly, internships allow them to “try-before-they-buy” and save money in the process.  Interns can usually be paid much less than traditional full-time employees, and they know from the get-go that the positions are temporary.

The tricky thing about internships is that companies sometimes think they don’t have to follow the typical employment laws with interns.  Some even try to implement unpaid internships, which are a no-no in most cases.

A better way to go would be to hire interns as contractors employed through a contract staffing back-office.  That way, companies can benefit from the “low cost, low commitment” tryout internships offer without all the hassles that come with employing those interns.

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888.627.3678
DFledderjohann@TopEchelonContracting.com
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

It’s a new year, and the usual predictions abound about what will be hot in 2012.  Based on what we’ve been reading and hearing, here are the recruiting trends we think recruiters should keep an eye on:

1. Social Media Recruiting Wars—The race is on to see which social network, if any, will unseat LinkedIn as the recruiter’s social network of choice.  When it was released last year, a lot of people had their money on Google+ due to it’s ability to separate contacts into “Circles,” allowing users to be selective about which contacts saw which updates.  But there is now talk that good old Facebook could emerge as a useful recruiting tool, especially with professional networking apps like BranchOut and BeKnown that help users find jobs through their Facebook friends.  As BranchOut GM of Enterprise told Fistful of Talent, 18.4 million Americans say they found their current job through Facebook, so it definitely seems like the potential is there.

2. Mobile Recruiting—MSNBC recently reported that 25 percent of people use their smartphones rather than their computers for most of their Web surfing, so you can bet a lot of job hunting is taking place on mobile devices.  This will most certainly only increase in 2012, so you might want to look at how your Web site looks from various smartphones and how mobile-friendly your application process is.  One possible way to make job ads more user-friendly is by using QR codes, which are those small, square, maze-like images that you might see in magazines or on billboards.  When someone scans one of these codes with their smartphone in one of your job ads, it could take them to additional information online.  For more ideas on how to use these codes, check out the www.ere.net article “QR Codes: The Next Big Thing in Recruiting Technology?”

3. Continued crackdown on independent contractors—This is not a new trend, but we expect it to be a big one, nevertheless.  Near the end of 2011, the IRS offered a forgiveness program for employers who voluntarily reclassified 1099 independent contractors as W-2 employees while at the same time vowing to be even more diligent about investigating worker misclassification.  Meanwhile, Congress reintroduced The Employee Misclassification Prevention Act.  It’s clear that this is an issue that’s not going away.  So if you have clients who are doing it wrong, you may want to urge them to make proper worker classification one of their New Year’s resolutions and offer to help them by converting their independent contractors to W-2 employees employed by a contract staffing back-office, such as Top Echelon Contracting.

4. Continued growth of contract staffing—The growth contract staffing experienced last year is no surprise.  Companies typically hire more contractors following a recession to test the hiring waters before they start hiring direct again.  But what we’re hearing is that there is more of a permanent shift where companies are maintaining a core of direct employees and supplementing it with a larger, more flexible outer ring of contractors.  We explored this trend in more detail in our Fourth Quarter 2011 Contracting Corner newsletter and expect to see this trend continue in 2012 and beyond.

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DFledderjohann@TopEchelonContracting.com
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For years, The Cornerstone, the newsletter of Top Echelon’s back office staffing, was sent to the Preferred Members of Top Echelon Network.  The Cornerstone was eventually discontinued in favor of another newsletter, Contracting Corner, which is now published once per quarter.  However, we still run contracting statistics in select issues of The Pinnacle Newsletter Blog.  These statistics include Non-Split Contract Placements, Split Contract Placements, and Non-Recruited Placements, among others.

Below are the most recent contracting statistics regarding Preferred Member recruiters, courtesy of Top Echelon Contracting.

Many of the Top Producers in Top Echelon Network have added contract staffing services to their business model and have also taken advantage of the services provided by Top Echelon Contracting, the recruiter’s employer of record services.

For more information about the benefits of contract staffing and the services that Top Echelon Contracting provides, call (888) 627-3678, Ext. 2.

(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

Technology is changing the way we do almost everything, and it seems that job interviews are no exception.

With the advent of Skype and other Internet video tools, video interviewing is supplementing, and in some cases replacing, the traditional in-person job interview process.

But is it right for you and your clients?

You might want to consider the following pros and cons before deciding whether or not video interviewing is the right way to go:

There are a variety of options for video interviewing, ranging from Skype’s free service to fee-based services that offer advanced features (e.g., allowing a large number of people on the video call).  Typically, video interviewing options can be broken down into two types:

1. Live—These are the kind that are performed on Skype where both the interviewer and candidate are present and interact with each other on the video.
2. Recorded—Interview questions are sent to the candidate, and they record their answers online via their Web cams for the employer to review later. There is no interviewer present.  These are often used in place of phone interviews to pre-screen multiple candidates.

Video interviews may be worth a look, especially if you’re placing contractors.  Contract positions often need to be filled quickly, and the candidates are often remote, making video interviews an attractive option.

— — —

888.627.3678
DFledderjohann@TopEchelonContracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

There’s a lot of good news about contract staffing as 2011 comes to a close.

Citing data from the U.S. Bureau of Labor Statistics, Staffing Industry Analysts has reported that the number of contract/temporary workers increased by 22,300 in November, bringing the total of contingent workers to 2.3 million after previous increases of 15,800 in October and 24,700 in September. Since last November, the United States has added 169,000 contract/temporary workers.

The reason for the increase? Well, for starters, there is flexibility.  After having to conduct mass layoffs during the recession, companies are now utilizing more contractors so they can more easily adjust the size of their workforce to their workload. But according to a survey by Staffing Industry Analysts, cost savings is also a huge reason. Companies surveyed reported that they saved an average of 13 percent by utilizing contractors.

Not surprisingly, the staffing industry itself is also reaping financial awards from this contracting surge. Staffing revenue was up 1.2 percent in the third quarter compared with the previous quarter, according to U.S. Bureau of Labor Statics data provided by Staffing Industry Analysts.  Over the past year, staffing revenue has increased 7.1 percent.

— — —

888.627.3678
DFledderjohann@TopEchelonContracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

With unemployment remaining steady around nine percent, the perception is that companies simply aren’t hiring.  But there are, in fact, many companies that say they are interested in hiring, but can’t find workers with the right skills.

How can that be when, according to the Bureau of Labor Statistics, there are an average of 4.7 unemployed people for every vacant job?  In a previous blog post, we talked about how employers are asking recruiters for more candidates even after the recruiter presents a great prospect because, with the unemployment rate so high, they don’t just want “great,” they want the “perfect candidate.”  But some experts are saying that this quest for perfection stymies the hiring process way before the interview process.

Specifically, hiring managers are over-emphasizing skills, certifications, and experience in specific roles in their requirements for open positions, according to Lou Adler, CEO and founder of talent management consulting firm The Adler Group.

“So if you’re focused completely on specific skills and experience, you’ll end up with average people and exclude the high potentials, who have a broad mix of skills,” Adler said in the Human Resources Executive Online article, “A Shortage of Talent? Really?”  “A better approach would be to define the work before you define the person you’re looking for, and then look for people who have done comparable work in comparable industries.”

But the problem is that employers don’t want to take the time to train those types of people, Peter Cappelli said in his Wall Street Journal article titled, “Why Companies Aren’t Getting the Employees They Need.”  They want someone who can perform the job immediately without any training.  Cappelli said these employers are creating a “catch-22,” where in order to get a job, candidates must already be doing essentially the same job.

So what’s the solution?  Cappelli said that employers need to give up on finding the “perfect candidate” and instead find someone who could do the job with just a little bit of training.  He advocates extended probationary periods during which the company could pay a little less until the worker is up to speed.

This is similar to the advice we’ve provided in previous articles about employers’ “perfect candidate” mindset.  You might be able to get your clients to give great candidates a chance by allowing them to “try-before-they-buy” with contract-to-direct arrangements.  In this scenario, the worker you place with them is employed by a contracting back-office, such as Top Echelon Contracting, during the trial period.  During that time, the company saves money because they don’t pay for the employer share of taxes, employee benefits contributions, unemployment or Workers’ Compensation premiums, etc.

Better yet, if the candidate is not working out, your client won’t feel like they have to keep investing time to develop them, like they would if the worker was an employee.  They can end the contract assignment and try someone else.  By giving candidates who have potential a chance, your clients might find themselves with a talent surplus rather than a talent shortage!

— — —

888.627.3678
DFledderjohann@TopEchelonContracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

While the recession has supposedly been over for quite some time, many people are still feeling its effects. And it is quite possible that Baby Boomers are having the hardest time bouncing back.

A recent U.S. News & World Report article examines “The Recession’s Impact on Baby Boomer Retirement.”  Here are some of the key take-away points from the article:

• Although the recession affected all age groups, Baby Boomers may not have enough time to rebuild their retirement savings, forcing many to put off retirement.
• On the other side of the coin, some were forced into early retirement because they were unable to find new employment after losing jobs during the recession.
• This has caused household income for those ages 55-64 to fall by 6 percent.

As a result, employers need to be ready for older workers who are either remaining in the workforce longer than expected or who are returning to the workforce on a part-time basis to supplement a less than sufficient retirement income.  A recent Staffing Industry Analysts article listed policy issues that employers will have to re-examine in light of this trend.  At the top of the list?  Offering “more flexible work patterns,” including telecommuting, consulting, and reduced hours.

This all plays into the retiree re-staffing trend we have been reporting on for the past couple of years.  By bringing older workers in a on part-time, consulting, or contract basis, employers can gain or retain these workers’ knowledge, while the workers can supplement their income and remain active on a more flexible basis so they can enjoy other activities and time with their family.

— — —

888.627.3678
DFledderjohann@TopEchelonContracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

Like they often do with unemployed candidates, employers tend to automatically eliminate any candidates deemed to be overqualified.  Employers assume that overqualified candidates will not be satisfied and, as a result, will not stick around long.

But according to a recent Business News Daily article, employers who blindly dismiss all overqualified job candidates could be putting themselves at a competitive disadvantage.  A recent study discussed in the article found that if these candidates are given challenging assignments, they can have a positive impact on a company.

According to the article, overqualified candidates can thrive in complex positions where they:

• Can freely make decisions
• Coordinate or lead others
• Be responsible for the outcomes of their work actions

Hmmm . . . those sound like common attributes of contract assignments.  Contractors are often brought in to take on challenging projects where they are expected to have the knowledge and skills to get the job done without a ton of oversight.  They usually decide the best way to get the job done and are responsible for the successful final outcome of a project.  Sometimes, they are even project team leaders.

Better yet, for overqualified candidates who crave a constant challenge, contracting is the perfect solution because contract assignments are only for a specific period of time.  When the project is done, they can move on to a new assignment, where they can once again put themselves to the test.

If you have candidates you are having trouble placing due to the perception that they are overqualified, you may want to consider offering them as contractors.  What may be considered a weakness in a direct-hire situation could be a great asset in a contractor.

— — —

888.627.3678
DFledderjohann@TopEchelonContracting.com
Connect with Debbie on LinkedIn.
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(Editor’s Note: This is the next in a series of guest blog posts about contract staffing, courtesty of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

The tough economy seems to have hit older workers particularly hard, and age discrimination claims are rising as a result.

According to an msnnbc.com article, age discrimination claims have hit record levels.  Citing Equal Employment Opportunity Commission statistics, the article states that claims have risen steadily from 16,000 in 2006 to 23,000 in 2010.

This is not surprising, considering the unemployment statistics regarding older workers.  Those age 55 and over are unemployed for an average length of 52.4 weeks.  The average is just 37.4 weeks for younger workers, according to AARP employment data cited in the article.  Also, more than half of the unemployed older workers are considered “long-term unemployed,” meaning they have been out of work at least 27 weeks.

Older workers are often the first to go in layoffs because they are usually the highest-paid workers.  They are also often overlooked for new jobs because employers (usually incorrectly) assume that older workers are less productive, are harder to train, are frequently absent, and invite higher health insurance costs.

On the flip side, more savvy companies realize that older workers come with a wealth of knowledge and often strong work ethics.  They are tapping into that knowledge base through a trend called retiree re-staffing, where companies retain or bring in older workers on consulting or contract assignments.  These arrangements are good for the workers, too, many who are not able or not willing to retire completely, but want a more flexible work arrangement than traditional full-time employment provides.

Older workers can find companies that will value the knowledge and experience they have to offer, but they may need to think outside the traditional work model to which they’re accustomed.  You can help them do that by providing contract opportunities where they can continue to contribute their expertise.

— — —

888.627.3678
DFledderjohann@TopEchelonContracting.com
Connect with Debbie on LinkedIn.
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