The latest statistics show that over one-quarter of the U.S. workforce is now classified by their employers as “contract” or “contingent” and the new burdens imposed by the PPACA is likely to see that percentage increase significantly over the next few years. For this reason, it is essential that companies develop tools and techniques to properly manage this segment of their workforce.
It may seem that many of the issues inherent in this process can be ignored as these workers are acquired through the use of staffing agencies or hired on a “contract” basis. In fact, companies may feel that these employees are merely an ad hoc addition to their workforce. Instead, companies must realize that it is the government that will eventually rule on whether these employees are, in fact, on contract. To make matters worse, the government does not seem to have settled on a final definition of the word.
While the prevailing HR mantra is that all workers should be treated the same in all business circumstances, this is an impractical ideal that is all but impossible to maintain. The simple fact of the matter is that it is extremely risky from a legal standpoint to treat contract workers like full-time employees. Instead, new procedures, techniques and tracking methods must be implemented to not only maximize productivity for the company’s own ends but also guarantee compliance with government mandates.
A New Paradigm
Many companies from the behemoth, CVS-Caremark, to the icon of high-tech, Microsoft, have been caught short by the meandering policies of government agencies and the socialist leanings of District Court judges. These companies and many others have been forced to re-categorize employees, pay them back wages and also ante up to the Federal government a substantial fine. If these titans of industry cannot navigate these uncharted waters, smaller companies should certainly beware.
Many small to mid-sized companies attempt to integrate the process of managing contingent workers in with their regular payroll and systems. Unfortunately, since these systems are not integrated with each other, this usually leads to a host of errors that can take many man-hours and weeks of actual time to unravel and fix – even if dealing with a relatively simple problem like missed hours.
The use of another HRIS, such as an integrated vendor management system (VMS), can proactively forestall many of these problems and also allow your company to track a variety of other productivity and compliance metrics. Not only will you keep the government off your back – now and for the foreseeable future – you will also be able to track the time and deliverables of the most under-managed part of your staff.
In short, if you are spending more time managing the management of your employees rather than their tasks themselves, it’s time to take a look at an HRIS system.