As reported in Part I of this two-part series, the National Center for the Mid-Market’s Q3 market review trumpeted “strong growth, confidence and optimism” among mid-market organizations of all kinds. With 7.0%, year-over-year revenue growth remaining steady and a well-above average 6.4% growth in employment rates, we suggested that now would be an excellent time for mid-market companies to invest in strategic workforce management programs and systems. In this segment, we’ll examine some of the other workforce management strategies and practices that could be of significant value to mid-market concerns.
With project-based work and the expansion of the “gig economy” exerting an outsized influence over workforce design, many companies are employing independent contractors in greater numbers. This practice comes with an inherent risk surrounding the proper classification of independent contractors or ICs. Even the largest organizations have been hit with IC classification audits by the IRS and have paid dearly for transgressions—either intentional or accidental. But, why leave the complicated process of IC classification to chance when there are expert providers ready, willing and able to help your internal workforce management or HR teams ensure IC resources are properly sourced and managed in full compliance with IRS regulations?
Take advantage of worker classification advisory and/or management services and alleviate your mid-market organization’s risk of misclassification penalties. These services provide independent contractor rate assessments too, helping ensure competitive rates. They also relieve the pressure to stay current with continuously changing local, state, and federal classification rules and regulations so you can focus more on growing your business.
Employer of Record (EOR) Services
In a similar vein, the EOR services from reputable providers can help organizations that utilize ICs and other W-2 contingent resources. The EOR, as its name suggests, acts as the actual legal employer for these resources, dramatically lowering your organization’s liability and exposure to audits and penalties. More than simply helping an organization determine whether the ICs they’ve engaged are compliant, the EOR represents more of a business process outsourcing solution. They source, pre-screen, on/off-board and administer benefits to contract labor so you don’t have to. They also ensure the resources they hire to work on your site(s) are compliant with all regulations and requirements.
This service relieves risks associated with workers’ compensation and other insurance, provides increased labor spend management/control, and minimizes the time, effort and overtime costs associated with learning and complying with employment laws within your internal workforce management function.
Services Procurement Support
If your company is engaged in statement of work (SOW) procurement—where an entire project is farmed out to be completed by an external labor force—then it may be useful to look at services procurement support. (SOW) administration can be outsourced to a trusted provider, from the moment a project has been awarded, schedules are created, performance reports are generated, and all contract items are tracked, ensuring service providers are performing to your expectations.
Services procurement solutions provide a single “system of record” to provide comprehensive governance of SOW engagements, tracking and supporting the entire SOW lifecycle. This includes the capture, tracking and enforcement of payment structures per SOW agreements, change order management, validation of supplier/resource compliance, consolidated invoicing and much more.
This is an exciting time of growth and expansion for mid-market companies. The organizations that take a proactive and longer-term view toward workforce management will likely be those that succeed in growing from the mid-market to the top tier of business.