(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.)

In the 19th century, it was the Industrial Revolution.  In the 1950’s, it was the shift from blue collar to white collar work. And some are predicting that we are now at the beginning of another workforce revolution: a shift from permanent employment to contingent work.

In his book Labor Rising, The Past and Future of Working People in America (a portion of which was reprinted in the Huffington Post), Richard Greenwald refers to it as the “Gig Economy” where workers “jump from job to job, career to career, project to project working as consultants.” He contends that this could be “the most fundamental economic shift of the past 50 years” and compares it to the 1950’s when “America became a nation of white-collar workers, leaving behind its blue-collar roots.”

“This sea of change has brought with it a new work ethic that values multitasking, embedded communities of workers, the blending of leisure and work activity, and the rise of creativity and independence, along with money as co-measures of success,” Greenwald said. “We seem to be returning to a craft sensibility as workers blend leisure and work and work harder, faster, and longer, but also find time to squeeze in a social life, too.”

Greenwald estimates that 50% of all workers will be working on a contingent basis by 2020. Thomas Fisher, Dean of the College of Design a the University of Minnesota, cites similar statistics in his article “The Contingent Workforce and Public Decision Making” in the Public Sector Digest. He states that 40-45% of workers will be contingent by 2020, and by 2030, contingent workers will be the majority in what he refers to as the “next economy.”

“In this next economy, workers will have much more flexibility in terms of how, when, and where they work, and they will have, over the course of their careers, many professional engagements and even several different careers altogether rather than the long-term, relatively permanent employment of the old economy,” Fisher said in the article.

We all know that the use of contingent workers has surged since the recession. Does this mean we are witnessing the start of a revolution? What do you think?

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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.)

What does a worker who has only been out of work for a month have in common with one who has been unemployed for six months to a year?

It appears they are both just as likely to be rejected for a job based on their employment status (or lack thereof), even as legislators move to make “unemployed discrimination” illegal.

A recent Huffington Post article discusses a study in which 47 human resource professionals were asked to review resumes that were identical except that half stated the candidate was currently employed, and the other half indicated the candidate had been unemployed for one month.  The HR professionals gave the currently employed candidate higher marks for competence and hireability.

The study also found that unemployed candidates who are laid off are not viewed any more favorably than those who quit their jobs.  However, candidates who were laid off because the company went under do appear to get more sympathy.

Employer’s’ preference for selecting candidates who are currently employed is nothing new, but the practice came under fire last year when job postings emerged specifically stating that unemployed candidates would not be considered.  As a result, lawmakers on both the state and federal level have considered legislation against unemployed discrimination.

New Jersey passed a law last year banning job ads that are found to discriminate against unemployed candidates. This past May, the District of Columbia took it a step further with legislation that made unemployed status a protected class, according to the Littler Mendelson law firm.  The law makes it illegal for employers in the District of Columbia to refuse to hire candidates based on their employment status.

So what are you seeing out there in the trenches?  Do employers tend to reject unemployed candidates, even if they have only been out of work a short amount of time?

— — —

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.)

In response to the growing need for skilled labor in the engineering and manufacturing sector, Top Echelon Contracting has worked with our insurance underwriters to allow the placement of more CNC machinists in a wider variety of work environments.

TEC already places a wide range of professionals in engineering and manufacturing positions.  In fact, engineering and manufacturing accounted for 18% of TEC placements last year.  As more manufacturing jobs are coming back to the United States, we wanted to expand our ability to place CNC machinists to address the growing need.

Alan Carty, President and CEO of Automationtechies and Automation.com, recently spoke to us about the role of CNC machinists in today’s industries.

“The CNC machinist job is dramatically different from the machinist role of 20-plus years ago,” Carty said.  “Today it is a hybrid position that not only requires the traditional machinist’s skills, but more technically advanced skills, such as CNC programming.”

Carty added that the need for skilled workers is tied closely to the increasing factory automation.

“Companies have been holding back because of the economy, but now the time has come to expand and start hiring,” Carty said.  “There is currently a strong demand for factory automation professionals.  In our niche, we are seeing more and more openings for process control engineers and automation/controls engineers, along with a multitude of other automation related opportunities.”

However, many of those openings are going unfilled as manufacturers struggle to find workers with the needed skills.  Manufacturing jobs, which were previously dominated by lower-skilled positions that only required a high school diploma, have changed dramatically since the recession.  Today’s jobs require some form of higher education or training.  But CFO.com reported that fewer than 10% of American teenagers are planning to pursue skilled-trade careers.

According to a recent survey by Deloitte Consulting and the Manufacturing Institute, there are approximately 600,000 unfilled manufacturing jobs.  Of the more than 1,100 manufacturing executives surveyed, two-thirds reported that they are facing a moderate to severe shortage of skilled labor.

Carty, who has been recruiting since 2000 and has a strong background in both direct hire and contract staffing, said there is currently a stronger demand for direct hire in his niche.  But he believes that as the number of automation projects continues to increase, contract staffing will also grow in this sector.

Contract staffing can help manufacturers with their automation projects and expansions in a number of ways.  First, contracting allows them to quickly bring in experienced skilled workers who can immediately have a positive impact on production.  Contractors also allow manufacturers to adjust their workforce based on the current demand for their products. They can utilize contractors when business is strong, and when there is a dip in business, they can end contract assignments without the negative press of a layoff.  In addition, contract staffing allows manufacturers to retain or bring back retirees who are already trained in their specific skill set.

CNC machinist opportunities span a wide range of industries and risk factors.  To find out if TEC can accept your CNC machinist contract placements, call us at (888) 627-3678.

— — —

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.)

The Sacramento Business Journal recently reported that lawsuits under the Federal Labor Standards Act (FLSA) have risen 33% over the past three years.  With that in mind, it seems like a good time to discuss when contractors must be paid for overtime.

First, let’s clarify what we mean by contractors. We’re are not talking about 1099 Independent Contractors.  We’re talking about workers who are placed on a contract basis at a client company and who are W-2 employees of a third party.

The FLSA requires that most W-2 employees be paid at a rate of 1.5 times their regular pay rate for any hours worked over 40 in a work week.  Some states have more stringent requirements.  For instance, workers in California must be paid overtime for any hours worked over eight in a day.

The FLSA does allow certain employees to be classified as exempt from overtime.  To be exempt, employees must also fall into one of the following classifications and be paid at least $455 a week on a salary (not hourly) basis:

• Executive
• Administrative
• Learned Professional

Keep in mind, however, that just calling someone an executive, for example, does not automatically make them exempt.  They must meet certain requirements to be considered exempt under one of these classifications.  Please see the exempt requirements provided on the Department of Labor’s website.

The rules are a little different for professionals working in computer-related and outside sales occupations.  Employees meeting the requirements for the computer-related exemption can be paid at an hourly rate if they are paid at least $27.63 per hour ($38.89 per hour in California).  Additionally, the salary requirements do not apply to those under the outside sales exemption.

If you’re placing contractors and run your own back-office, you are responsible for properly classifying contractors as exempt or non-exempt and paying overtime when required.  But even if you’re utilizing a contract staffing back-office that handles those responsibilities, it’s important that you’re aware of the requirements of the FLSA since your clients often look to you as an employment expert.

(This article is for informational purposes ONLY and should not be considered legal advice.)

— — —

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.)
Not so long ago, many people felt compelled to choose between their career or family.  Now, as buzz phrases like “work-life balance” take over the workplace, the focus is on “having it all.”

While having it all may sound great in theory, it’s hard to come by in practice.  Juggling a full-time job and family responsibilities (which for many workers includes caring for children AND elderly parents) is not for the faint of heart.

That’s why, according to a recent Wall Street Journal article, many skilled professionals are turning to contract staffing.  In what the article calls “a major shift,” temporary/contract placements of college-educated professionals has outpaced those of clerical and blue-collar temps.

In fact, placements of contractors in healthcare, technology, engineering, science, law, and accounting are expected to make up 52% of the expected $100.3 billion staffing industry revenue in 2012, according to the article, citing Staffing Industry Analysts statistics.

The article states that the reason for this shift is that workers are trying to find work with a more flexible or part-time schedule.  Contract/temporary work is a viable route to flexible work, particularly for those with in-demand skills such as engineering, IT, programming, and social media.

The article further states that these workers make between $20-$200 an hour, but typically do not get benefits.  This is where you, as a recruiter, can really make a difference.  Lack of benefits is a major factor that often holds candidates back from considering contract work.

But you could place your highly skilled candidates as contractors and outsource their employment to a contract staffing back-office, such as Top Echelon Contracting, that provides them with benefits.  That way, they can enjoy the flexibility that is possible through contracting without missing out on the benefits they can gain through traditional, full-time employment.

As a recruiter, your job is to provide your clients with the best of the best.  By providing candidates with the opportunity to “have it all,” you can attract the highest caliber talent and, as a result, attract the best placement opportunities.

— — —

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.)

E-Verify is an online system that checks information provided on an employee’s Form I-9 (Employment Eligibility Verification) against data from the Social Security Administration and Department of Homeland Security.

While the system isn’t mandatory for all employers, there is federal legislation pending to change that.  And many employers are already required by state or local law or under federal contracts to run their employees through E-Verify.  But why should that concern you as a recruiter?

Well, if you’re placing contractors and running your own back-office, YOU are responsible for running your contractors through E-Verify, if required.  That means you need to keep up with the federal laws, as well as those in all of the areas in which you place contractors and make sure that you’re in compliance.

If you are required to E-Verify contractors, you’ll need to be trained and certified to use the system.  You must run new contractors through the system within three business days of their start date.  Of course, this is after you’ve had them complete Section 1 of the I-9 on their first day of work and you have completed Section 2, which is a task that also must be completed within three days of their start date.

Even if you use a contract staffing back-office, you still want to ensure that the back-office is running contractors through E-Verify when required.  Not only that, but many clients are requiring that contractors placed at their companies are run through E-Verify, even if not required by law.  If you want to get placements from those clients, you’ll want to be sure to use a contract staffing back-office that is certified to run E-Verify.

Your best bet is to align yourself with a contract staffing back-office, such as Top Echelon Contracting, that runs all of their contractors through E-Verify.  That way, you know all of your placements will be compliant with any applicable E-Verify laws and you won’t miss out on any placement opportunities.

(Editor’s note: this article is for informational purposes only and should NOT be considered legal advice.)

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
Follow Debbie on Twitter.

(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 it or not, it looks like the Patient Protection and Affordable Care Act (PPACA), otherwise known as “Obamacare,” is here to stay.  Even if the upcoming election is a Republican landslide, experts say it is unlikely that the healthcare reform will be completely repealed.

One of the upcoming provisions worrying employers the most is the employer mandate.  Under this provision, employers with 50 or more full-time employees will be required to provide affordable healthcare insurance or pay a $2,000 annual penalty on each employee, minus the first 30 employees.

Even if they do offer insurance, they could be subject to penalties if the coverage is “unaffordable,” meaning that it costs more than 9.5% of an employee’s income or the employer pays less than 60% of the premiums.  And if they do offer coverage, their plan will be subject to new taxes and requirements under the PPACA that will increase their costs and administrative burden.

Even though the mandate won’t take effect until 2014, employers are already looking for ways to avoid these costs.  Some may shift some of their full-time employees to part-time to get below the mandate’s threshold.  Others may be tempted to classify workers as 1099 Independent Contractors, but since there has been a crackdown on worker misclassification at both the state and federal levels, this isn’t the wisest choice.

Some business owners are even considering breaking up their companies into smaller businesses to get around the employer mandate, according to a recent CNNMoney article.  But since the employer mandate looks at the total number of workers employed under common ownership, that also is not a viable option.

One possible solution is utilizing contractors who are W-2 employees of a recruiter or a contract staffing back-office.  In this scenario, it doesn’t matter how many hours the contractor works because they will be counted as an employee of the recruiter or back-office, not the company.

The demand for these types of positions has already surged since the recession due to economic uncertainty, employers’ desire for a flexible workforce, and increased employment regulations.  In fact, according to the American Staffing Association, temporary/contract positions accounted for 91% of job creation between June of 2009 and June of 2011.

Only time will tell if “Obamacare” really affects the number of contractors in the workplace, but as employers try to contain their costs, contract staffing offers a viable solution.  You’ll want to be sure that you’re able to provide contractors so that you can be a sole-source provider for your clients, able to handle ALL of their staffing needs.

But keep in mind, if you have more than 50 contractors and you run your own back-office, you’ll be subject to the employer mandate and will either need to offer insurance or pay the penalty.

If you outsource to a contract staffing back-office, the contractors will become their W-2 employees, so the back-office, not you, will be responsible for complying with PPACA.

(Editor’s note: this article is for informational purposes only and should NOT be considered legal advice.)

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
Follow Debbie on Twitter.

(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 is a huge demand for healthcare professionals as the American population continues to age.  To achieve workforce flexibility, many healthcare providers are filling their open positions with contractors.  This creates a tremendous opportunity for recruiters who can work this niche.

If you place healthcare contractors, though, you need to take extra care to qualify healthcare contractors and take steps to protect your firm from liability.

Failing to handle healthcare contract placements properly could result in severe consequences for your clients, their patients, and the employer (which is YOU if you run your own back-office).

To avoid problems, be sure that you or your contract staffing back-office:

1. Have a Certificate of Insurance that includes sufficient medical professional liability insurance.

2. Run background checks and drug screenings on every healthcare contractor.

3. Have healthcare contractors sign a HIPPA Agreement stating that they understand and will comply with the Health Insurance Portability & Accountability Act (HIPAA).

4. Verify their immunizations, specifically Hepatitis B and Tuberculosis.

5. Verify that they have any required licenses and that those licenses are up-to-date.

6. Conduct an OIG/HHS (Medicare Fraud) Search.

7. Conduct an Excluded Parties List System Search (EPLS).

8. Conduct Bloodborne Pathogens training and testing.

9. Have contractors complete occupation-specific skills checklists.

10. Verify their CPR training and certification.

11. Conduct FBI fingerprinting if the contractor will have contact with children.

Instead of handling these extra tasks yourself, you may want to consider outsourcing the employment of your healthcare contractors to a contract staffing back-office, such as Top Echelon Contracting.

We conduct the tasks listed above on all of our professional healthcare contractors, and we recently expanded the types of healthcare placements we can handle. To find out if we can handle your healthcare placement, call us at (888) 627-3678.

— — —

888.627.3678
dfledderjohann@topecheloncontracting.com
Connect with Debbie on LinkedIn.
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At Top Echelon Network, we encourage our Preferred Member recruiters to send us articles of interest to share with the rest of the Membership, articles that affect what recruiters do on a daily basis.

Bruce Widnes of The Recruiting Group, Inc. sent us just such an article recently.  That article is “Americans Cling to Jobs as U.S. Workforce Dynamism Fades” by Rich Miller.

Click here to read the article in its entirety on the Bloomberg website.  Below are passages taken from the article that are especially relevant for recruiters and their dealings with candidates.

Passage #1:

Spooked by the severity of the recession and stuck with underwater home mortgages, Americans are less inclined to leave their jobs and less willing to strike out on their own to build businesses, government data show.  Even with swelling profits, companies are holding back on hiring, complaining that they can’t find skilled workers for positions they do have open.

As a result, the labor market is losing some of the dynamism for which it’s long been known.  And the trend predates the recession: an aging population and the growth of two-income households have reduced Americans’ mobility to about half of what it once was, while technological gains and globalization have led to a loss of middle-income jobs.  The economic slump only exacerbated the loss of vigor.

Passage #2:

In the past, such geographic disparities would have been ironed out as Americans flocked to where the jobs were.  Labor mobility has long been a major source of strength for the U.S. jobs market when compared with Europe.

That is less the case today.  About one in 10 Americans currently move each year, according to James Manyika, director of the McKinsey Global Institute, the research unit of consultants McKinsey & Co.  That’s well below the roughly one in five average that prevailed from 1945 through about 1990, he said.

The percentage of Americans who changed residences between 2010 and 2011 fell to a record low of 11.6 percent, from 12.5 percent the previous year, according to Census Bureau figures.  That compares with 17 percent in the recession of 1990-’91.

The rise of the dual-income family is one reason, he said: when both partners are working, it’s harder to coordinate a move.  More recently, the collapse in housing prices has played a role in damping mobility, he added, although [Steven Davis, professor at the University of Chicago Booth School of Business], said that research suggests the impact of that is small.  More than 11 million households owed more on their mortgages than their homes were worth in the fourth quarter of last year, according to data provider CoreLogic, and would face losses if they opted to sell to move elsewhere for work.

While Americans are more willing to leave their jobs for other opportunities than they were at the depth of the recession, they still have a way to go before they regain the confidence they exhibited prior to the downturn.

The so-called quit ratio—which measures the number of people voluntarily leaving their jobs as a proportion of total employment—stood at 1.6 percent in March. That’s up from a low of 1.2 percent almost three years ago, yet still well below the 2.3 percent peak seen in late 2006.

“We just haven’t had people changing jobs enough,” said Betsey Stevenson, an assistant professor at the University of Pennsylvania’s Wharton School in Philadelphia and a former chief economist at the Labor Department.  “We need to see people have the confidence to quit their job and find a better one and create an opening for someone else.”

The jobs recovery hasn’t been strong enough to convince many Americans to re-enter the labor force and start looking for work again.  The labor participation rate—the share of working-age people holding a job or seeking one—stood at 63.8 percent in May, just above a three-decade low of 63.6 percent the previous month.

What are YOUR thoughts about this article?  Does it accurately reflect what you’re currently seeing on your desk?  If not, why not?

Do you have an article of interest that you believe would be beneficial for the rest of the Network Membership?  Send it to marketing@topechelon.com, and we’ll include it in a future issue of The Pinnacle Newsletter Blog.

(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.

— — —

888.627.3678
DFledderjohann@TopEchelonContracting.com
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