(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.

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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.)

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!

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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.)

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.

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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 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.

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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, 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.

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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.)

If you have clients who have been misclassifying W-2 employees as independent contractors (ICs), the Internal Revenue Service (IRS) is providing a way for them to come clean.

Through the agency’s recently launched Voluntary Worker Classification Settlement Program, if employers voluntarily reclassify their ICs as employees, they will only be required to pay a small portion of the back payroll taxes they owe.

To be eligible, the employer must:

• Have consistently treated workers in the past as nonemployees.
• Have filed 1099s on those workers for the previous three years.
• Not currently be undergoing an audit by the IRS, Department of Labor, or any other state agencies.

Employers can apply for the Voluntary Classification Settlement Program by filling out Form 8952.  If accepted, the employer will pay the IRS just around 10 percent of the payroll tax liability that should have been due for the past tax year (equal to about one percent of the wages paid to the workers during that year).

But why wouldn’t an employer just quietly reclassify their workers and pay nothing?  Well, if they participate in the program, the IRS will not audit them on prior payrolls for those workers.  If the past misclassification was found during an IRS audit, not only would the employer have to pay the entire amount of back taxes due, but they would also be subject to penalties and interest.  And, according to The Wall Street Journal, the IRS is planning to be even more diligent about investigating worker misclassification going forward.

You can help make it even easier for clients to fix their misclassification errors by converting their 1099 independent contractors to W-2 employees and outsourcing their employment to a contract staffing back-office, such as Top Echelon Contracting.  That way, your clients can still keep their costs and administrative hassles down, but they can do so legally without the threat of an IRS audit, because all of the required payroll taxes are paid by the back-office.

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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.)

Working mothers are helping to create a new niche for recruiters—placing parents in flexible work arrangements, according to The Washington Post.

The traditional workplace model has left many mothers passed up for promotions and relegated to less time-sensitive, mundane work.  For some, it has forced them out of the workforce altogether.  According to one survey, 30 percent of mothers with MBA’s have opted out of the workforce.

But many of these women want to continue working and can provide valuable experience and knowledge if allowed to do so on their own schedule.  For example, many parents can achieve the same results by working while their kids are sleeping at hours much earlier in the morning or later at night than the traditional workday.

Some are even willing to take contract assignments with no benefits for this type of flexibility.  (Note: this is not necessary when they take an assignment through a recruiter who uses a contracting back-office, such as Top Echelon Contracting, that provides benefits.)

In light of this emerging need, some recruiting firms are building their business models around placing mothers in positions with fulfilling work that they can complete on their own schedules.  These firms can negotiate contract assignments, consulting arrangements, telecommuting, part-time hours, and other flexible arrangements for those balancing work and family obligations.

Of course, as companies continue to run tighter ships in the wake of the recession, these arrangements can be equally as good for them.  We have written numerous times on how companies are utilizing more contractors because they don’t want to commit to full-time employees and they value the flexibility that contractors offer.

It sounds like these women who are hungry for flexible, challenging work could be the perfect match!

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

(Editor’s Note: This is the first 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 recent practice where employers specifically state in job postings that they will not accept unemployed candidates has ignited a firestorm and has some crying “discrimination.” Some lawmakers are even moving to make banning unemployed job candidates illegal.

In fact, New Jersey has already passed a law forbidding job ads that are found to discriminate against the unemployed, according to The Employer Handbook, a blog by attorney Eric B. Meyer. The law states that job advertisements can’t include provisions stating that current employment is a job qualification, that the company won’t consider applications submitted by unemployed candidates, or that they will only consider applications from currently employed candidates, according to the blog.

On the federal level, the Equal Employment Opportunity Commission (EEOC) recently held a hearing to determine how prevalent banning unemployed candidates is and if it is discriminatory, according to employment attorney Lisa Yankowitz’s weekly Informed Workplace video.  While unemployed individuals are not specifically protected under any federal anti-discrimination laws, these practices could be considered discriminatory if they create a disparate impact against a protected class.

Disparate impact occurs when a policy that seems neutral on its face disproportionately impacts members of protected classes. Considering that certain protected groups, such as African-Americans, Hispanics, and the disabled, have a much higher unemployment rate than the national average, it is quite possible that a company policy against hiring the unemployed could create a disparate impact, Yankowitz says in the video.

According to Yankowitz and the Huffington Post, unemployed individuals will be specifically protected under federal law if Rep. Hank Johnson (D-Ga.) has his way.  He has introduced The Fair Employment Act of 2011 which would amend the Civil Rights Act to make it illegal for companies to make hiring decisions based on a candidate’s employment status.

It will be interesting to see where this goes.  Will more states pass laws banning ads discriminating against the unemployed? Or will federal legislators beat them to the punch and make the unemployed a protected class? Either way, it appears this is a topic that will be sticking around for awhile and could result in more legal restrictions for employers.

While most of your clients have probably not published job ads specifically banning the unemployed, chances are you may have encountered situations where a client has told you not to present unemployed candidates.  You may want to make them aware of the growing legal movement against his practice and remind them that there could be very good candidates out there who happen to be unemployed, particularly now in the wake of “The Great Recession.”

And you can offer to let them try your currently unemployed candidates by starting them on a contract basis before they “buy,” or extend the direct-hire offer.  Not only will they keep themselves out of potential legal hot water, but they may also find that some of the best employees are still on the unemployment lines.

For all the latest contracting news and information, subscribe to the Top Echelon Contracting blog!

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

Some of the Top Producers in Top Echelon Network offer contract staffing to their client companies.  In this episode of “Top Echelon TV,” Top Echelon President Mark Demaree interviews Debbie Fledderjohann of Top Echelon Contracting, who explains the advantages of contract staffing and how recruiters can get started offering contracting to their client companies.  She also talks about why it’s important how you’re classifying your contractors if you run your own back-office.

If you don’t offer contracting to your clients, you should start.  You’re leaving money on the table that other recruiters are only too glad to snatch up.

If you have any questions, visit Top Echelon Contracting’s website at www.TopEchelonContracting.com or call (330) 454-3508.