Everyone knows worker classification is important and the consequences of failure in this activity can be costly and damaging to your contingent workforce program. So what is one to do when an excellent candidate self-identifies as an IC but internal stakeholders and/or workforce policies disagree with the self-assessment? Is it worth the risk to overlook/override the stakeholders’ concerns? Isn’t this just the type of dilemma organizations seek to avoid by engaging Managed Service Providers in the first place?
Cara Kresge of burgeoning business management consultancy, Brightfield Strategies, writes in a recent blog post, “Managed service providers have recently introduced a new role called the talent advisor, someone to act as a strategic advisor to the client and individual hiring managers. In theory, the talent advisor helps determine what type of labor is required for a given opening and then how the worker is ultimately classified.” Whether or not you use an MSP to manage your contingent workforce, there are steps you can take to cultivate a talent advisor role internally. Here’s what you need to know to develop a standardized classification decision process ensuring classification decisions are made in a thoughtful and compliant fashion – every time.
Start by drafting concrete definitions of each worker type you could potentially employ within your organization as a contract worker. Some examples may include: contingent laborer, temp/agency/EOR worker, independent contractor, SOW/project worker, outsourced service, etc.
Next, be sure to outline the sub-categories of these worker types. Sub-categories may include freelance workers, part-timers, offshored resources, and day laborers.
Be certain there is no overlap between contingent job titles. If you encounter similar job titles you can assume there is an opportunity for misclassification.
Identify and define what the drivers are behind your existing hiring decisions. Then involve considerations of such things as culture, policy, process, and contracting before designing a new talent acquisition and classification process.
Lastly, be sure to propagate your policy and associated guidelines throughout the entire organization to ensure classification is administered uniformly. You can even codify your talent advisory practice using your existing VMS or other sourcing tools to automate the process. Be sure to communicate the new advisory process and be prepared to manage any friction that may occur as part of change management best practices.
Whether you’ve decided to rely on your MSP provider to act as your talent advisor or you’re inclined to handle it on your own, having a solid, clearly enunciated process makes the difference between success and failure.