White Papers

Variables of Staffing Supplier Pricing
By Terrie Weinand, COO

What compels a supplier partner to agree to a reduction in markup from 39% to 36%? What impact does a 2.5% VMS fee have on a supplier’s margins and why do they argue that it is more than 2.5% of their markup? Are they right? And what arguments can the client or MSP make to a supplier partner that would be meaningful in a negotiation on pricing for a new piece of business?

These are all questions to which those of us who negotiate supplier pricing must have answers. Pricing negotiations, to be successful, must offer wins to both sides in the deal. You have to be able to get inside the business heads of your suppliers. When you do that, the result can be long and mutually satisfying relationships that produce qualified talent, recruited in a timely manner and at fair prices, for many years.

Every industry prices their goods or services via a set of variables that are meaningful to them, with each variable weighted in the minds of buyers and sellers. Understanding what benefits your suppliers is the first step in getting to a win-win outcome in pricing negotiations.

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The Auditor is Coming
And now is not the time to have misclassified independent contractors!
By Judith Benson, Director Global Compliance

Layoffs caused by the recent economic crisis have left projects incomplete and work undone across Corporate America. As the economy improves, and while hiring freezes remain in effect, many companies are looking to independent contractors to take up where employees left off. However, now is not the time to take the risk of using independent contractors who have little business substance and will, very likely, be reclassified as employees. All indications are that enforcement of payroll tax laws, by both the state and federal governments, will be increasing.

The federal and state governments are also feeling the results of the crisis. Tax revenues are down, unemployment insurance funds are in the red, and workers not covered by Workers’ Compensation are draining health care resources. Studies by the General Accounting Office (GAO) and the Department of Labor (DOL)1 have shown that there is a major gap between what is owed in taxes and what is paid. The Internal Revenue Service (IRS) estimates the gap to be $345 billion dollars a year and growing. A significant portion of the shortage is caused by an estimated 30% of U.S. corporations who misclassify employees as independent contractors.

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Co-Employment Management
By Terrie Weinand, COO PrO Unlimited

Co-employment liability for contingent workers is a little like discovering you suddenly own your rental car. Without quite knowing how it happened, you’re now responsible for tune-ups and new tires, and, oh yes, let’s not forget insurance! Everything you do for you own car – you now have to do for the rental too.

A little far-fetched? Yes, definitely, but fears abound that renting “talent” in the form of temporary and contract workers means they will claim your benefits and other perks you intended only for your own employees. This paper intends to demystify co-employment and provide strategies to mitigate those liabilities that, in our experience, are real but manageable.

Co-employment (or joint employer liability) refers to the situation where two companies are both viewed as having the position of employer. Perhaps the staffing firm recruited the worker, pays him and provides benefits. But the end-user provides the work environment and gives day-to-day task direction. Both have some responsibility as employers, but the degree can be controlled and therefore mitigated. No contingent worker who is properly engaged and managed throughout his/her assignment can claim your benefits if you have taken reasonable steps in protecting those benefits. There are simple steps every user of contingent workers should take that will ensure successful use of temporary labor within your organization.

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Length of Stay Policies
Are they an effective solution to co-employment liability?
By Terrie Weinand, COO and Judith Benson, Director Global Compliance

We can all appreciate finding a simple answer to a complex problem – and some large users of temporary and contract labor believe they have discovered a panacea for co-employment liabilities; namely instituting length-of-stay policies. The theory being that if you push temporary workers out the door after a specific time period, say six months or a year, then you enjoy relief from the risk that they might be found to be your employees and thus eligible for fringe benefits you only intended for your regular employees.

There is no arguing that some level of co-employment liability rests with every end-user into whose offices temporary and contract labor are sent to perform their work. The client does exert control over their facility, their staff and their managers who interact with contingent workers. They are expected to provide direction regarding the tasks that temporary labor is brought in to perform.

We have seen many organizations minimize co-employment risk with a strong dose of common sense and consistent process management without applying artificial limits to contingent assignment limits which can be almost impossible to enforce. The question this white paper explores is, “Do such policies work, and if not, what does?”

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