INFO/RESOURCES – FOR PEOPLE MANAGERS / HR PROFESSIONALS

A 7 Step Journey to Stress Free Firings!

by Jeanne Knutzen | April 1, 2024

0 Author-Jeanne, INFO/RESOURCES - FOR PEOPLE MANAGERS / HR PROFESSIONALS, INFO/RESOURCES - HIRING / CANDIDATE SELECTION PROCESSES, Thought Leader / Featured Blogs* get connected

Hiring and firing are not just the opposite ends of the staffing spectrum, but together represent the two most important staffing decisions managers make when building their teams. … Read More »

Technology. Relationships. Are your people finding the right balance?

by Sara Bennett | March 18, 2024

0 Author-Jeanne, INFO/RESOURCES - FOR PEOPLE MANAGERS / HR PROFESSIONALS get connected, main whats happening

As a recruiting organization, AI is on deck to change just about everything we do, including how we interact with each other.

What's AI on deck to do for your company?  

In our case, we know we've always been a bit geeky – in fact we were one of the first staffing agencies in the nation to embrace basic computer technology to classify and store records of candidates, clients, and job orders. Yes, we even had the audacity to believe that a computer could find the right matches between candidates and jobs faster than we could do it manually.  We were somewhat alone at the time - but not for long!

To be honest when we first got our big IBM computer in a box (1984 to be exact) our competitors actually wondered what we were doing – claiming we were using our new big computer to get us out of the people business. My guess is they were simply resisting the inevitability of change. I can’t believe they actually liked the very hard and tedious work of thumbing  through stacks of resumes, job order records, and business cards to do their business. But perhaps they just didn’t see how much of their day was spent doing all those tedious tasks instead of interacting with people. Today  - we’re still geeky. We think AI has a really important role to play in how we go about our day. It's already helping us do our work faster, speeding up the time it takes to get thru all those tedious and redundant tasks that are a part of every hiring process. It takes notes at meetings. It reminds us of our promises to one another. And we so appreciate all that help! That said, we also learned a long time ago that it is the relationship side of our business that actually drives success. Today we are  quick to use AI wherever we can, but we also preach the importance of the relationship side of our business reminding folks it has to stay in tact. Our leaders remind our people of that truth each and every day. We’re sharing all this because we know that at the core of every successful business, not just staffing companies, its the strong relationships between people - co workers, staff and management, account managers and customers - that make the difference. And these relationships are built on the time honored values of trust, understanding, and authenticity – qualities that to date AI can’t quite replicate for either our team or yours. We believe that getting too far into the AI camp, can actually hurt our businesses. We’re also  suggesting that as we move into an era where technology can do so much, it might be time to take a good look at the people who are interacting with our customers - making sure they are the kind of people who will continue to value relationships in a world where its just plain too easy to hide behind a smart phone, a computer, an AI bot. We've already seen - not all employees know where to draw the line.

Here’s some of the ways that we believe that its still going to be the people in our companies, not just the latest technologies, that will make a difference to our success!

We think of these as important elements to the relationship side of our business, and may be important to your relationship side as well!  These are the questions that company leaders might want to start asking about to make sure that as once again start to indulge our geeky sides, we have the right people on our bus who are both geeky and relationship builders.    

Are your people asking the right questions?  We've always been proud of the fact that in our intake meetings with a new client, we so often hear –“That’s a great question.  I’ve never been asked that before.” Internally, we don’t look at our questions as that  magical. In fact from our perch we are simply asking about things we need to know more about if our goal is to help our clients hire people who can not just do the job, but people who want to do the job and want to do it well. People who are the "right fit" for the team they will be joining. Why are you hiring now? What results are you expecting this employee to achieve? On day one? On day 555? What challenges do you anticipate they will face if the goal is to get them to day 555? We think that’s all important, and are always surprised to hear that not all recruiters ask these questions.

Maybe we’re just the curious type, but in our our business, we assess the quality of our work by the quality of our questions!  Are your people curious enough to keep asking the kind of questions that make a difference?
Are your people coming up with new, more innovative solutions? While AI can offer up recommendations based on data, they can’t come up with solutions that haven’t been thought of before. In our business, for example, we hold ourselves accountable to be the ones who think outside the box, use our experience and intuition to come up with ideas to help our clients solve their staffing challenges that AI simply might not know exists. That’s why our intake calls and the level of homework our recruiting teams do before we even start a search is so important to the success of our staffing projects. Yes, we have to ask the right questions to get our clients to articulate the key elements of their company culture, but we also have to ask our candidates questions about what’s important to them about the type of company culture that works best for them, to make the right matches. Asking great questions starts the matching process, but you don't have the right solution to put the the two sets of answers together, it doesn't work. We believe it takes the human touch to make that match. AI is great at capturing history, but the solutions worth their salt have to be focused on the future.
Someone famous once told us you can’t solve a problem by using the same thinking that created the problem in the first place.   Are your people creative and bold enough to come up with new solutions that make a difference to your customers?
Are your people taking the time to discover the bigger picture of what's going on with their customers - their  CONTEXT?  For PACE whether our customer is a hiring manager or a candidate, understanding the context in which their need or want is being surfaced is vitally important to recommending the right solution. A candidate can go on forever describing their dream job but unless we know their real goal is to go to work now to pay next month’s mortgage, we will not be doing our job. A hiring manager can give us a long list of skills, knowledge and work experiences they think are necessary to "do the job", but unless we have that conversation about the personal qualities that matter to “fit”,  and identify all the temporary hurdles they will need to overcome in order to achieve the expected results, all the skills, knowledge and experience a candidate brings to the table, won't translate into a successful hire.
A good understanding of reality is what it takes to be persuasive. Are your people savvy enough to explore all aspects of your client's CONTEXT?             

In Summary....

As organizations continue to embed AI into their operations, we think finding the right balance between a company’s geeky side and their ability to keep it real with their customers is going to be a key driver of their success. At PACE we know we need to leverage the right technologies just to get in the staffing game, but to stay in the game we need to build and nurture the up close and personal side of our business. For us, this "balancing act" is the foundation of the strategies and tactics you'll see us using on the go forward.  Everyone we touch -  job seekers, hiring managers, HR leaders, CEO and CFOs – will feel heard, valued and understood, and we think that will be a different experience from what they might experience elsewhere.
Do you have enough difference makers on your team?  As we steadily march into a world dominated by technology, we think all businesses are going to need more of them!

How can PACE help?

Focusing our recruiting services on helping clients identify employees who can not only do the job but are the right fit for the teams they enjoy, is one of the mainstays of our service platform.  Finding employees who are the "right fit" doesn't happen just by scanning resumes, asking a few questions in a screening interview, and then turning to AI to identify the matches. No, our services are much more than that. Making a difference in who and how our our clients hire starts with detailed homework about the job, the company, and the client's current context, rolls into state of the art candidate screening and fit finding assessments that are built into every step of our hiring process, and providing clients with information about their candidate of choice every step of the way. Whether our client's use us to find an employee to hire direct, or a temporary or contracted employee to staff a project or cover for a leave of absence, what we do to find the "right fit" breaks all norms to avoid those costly staffing mistakes.  
PACE Staffing Network is one of the Puget Sound’s premier staffing /recruiting agencies and has been helping Northwest employers find and hire employees based on the “right fit” for over 45 years. A 5-time winner of the coveted “Best in Staffing” designation , PACE is ranked in the top 2% of staffing agencies nationwide based on annual surveys of customer satisfaction. PACE services include temporary and contract staffing, temp to hire auditionsdirect hire professional recruiting servicesEmployer of Record (payroll) services, and a large menu of candidate assessment services our clients can purchase a la carte. To learn more about how partnering with PACE will make a difference to how you find and hire employees,  contact our Partner Services and Solutions team at 425-637-3312, email us or visit our website.

How to Keep Your Dream Team Together!

by Sara Bennett | March 18, 2024

0 Author-Jeanne, INFO/RESOURCES - FOR PEOPLE MANAGERS / HR PROFESSIONALS get connected, main whats happening, Whats Happening

No matter how tenured or loyal your admin team, it's never a good idea to believe they'll be there forever! 

Yes, key members of your admin team, like all your employees, are vulnerable to turnover - no matter how important they are to your company, how much you rely on them for everyday support, how loyal you believe they are to you, their team, the company. And when a valued admin team member quits, its not always pretty. It often happens unexpectedly, at a time when you have the least bandwidth to deal with change. And yes, losing a member of you admin team always means change! And shame on any of us who didn’t take the time to see it coming. The reasons why admin employees quit sound very much like the classical reasons for all unwanted turnover.
“I wasn’t really looking to change jobs, but an opportunity came up that I just couldn’t pass up.” 
And these "new opportunities" should sound familiar.  Your favorite person on earth, your admin support, has just told you something you should have known.  I just wanted to....…
  • Make more money.
  • Get better healthcare benefits for my husband's new illness  
  • Work closer to home (or in today’s market - to work more days from home)”
  • Find better work/life balance – less stress, fewer hours of work
  • Try something new (or more meaningful)
  • Get away from ________ who has been pissing me off for some time 
Yep, we’ve heard it all. It might be of interest,  and psychologically soothing,  to know that turnover and all the disruption it creates is a much bigger component of everyday life at enterprise level organizations (as compared to what happens  in smaller organizations like ours). According to some recently generated research sponsored by customer.ai, the Northwest “bigs” deal with a level of churn that would bring most of us to our knees. Check out this data showing the average length of time an employee is in the workforce for the following companies…
  • Facebook 2.02 years
  • Google 1.9 years
  • Apple 1.85 years
  • Amazon 1.84 years
  • Microsoft 1.81 years
Looks to me that one of the ways smaller organizations can compete for talent is to find new ways to retain their employees for more than 2 years. Now that’s not a high hurdle.
And keep in mind that when you get better at retaining your admin staff you also impact the retention of the people they support.  The old trickle down effect. Putting focus on retaining the key members of your admin team can indeed create a competitive advantage.

We’ve put together some ideas to help you retain the members of your admin team...

...these are suggestions we’ve used on our own team, plus seen our clients use in their work environments - in most cases very successfully.  As we all know there is no ONE magic bullet that fixes everything.  Nor should we expect to get to a level of turnover that keeps us safe from an unwanted turnover.  What we can do is a whole bunch of little things that we think will impact how you work with and develop a high performing admin team. Certainly those of us who fall into the small to medium sized group (SMEs) can do these things better than our Northwest bigs. Check out these ideas….

Adjust your expectations for longevity.  You're not living in the 80’s. 

Gone are the days when an admin employee earns their stripes only after being in their job for a “really long time.” Based on the data we see, and the resumes we review, employers who can keep a good member of their admin team happy, productive and contributing for 3 or more years should consider themselves successful. That said, if you aren’t retaining who your new hires in their admin roles for more than a year it might be time to re think your hiring process. The data clearly suggests that to avoid surprises, you need to stay close, checking in with an employee on what’s going on with them, every six months, or even more.

Remember what was important to your employee when they were hired!

We believe that any retention strategy worth its salt, starts during the hiring process.   As part of the hiring equation, a hiring manager needs to learn about why the employee works, what they want to achieve through their work. The employee needs to learn about the company and its mission. Where is it going? How they will fit in? If you’re walking thru all the steps in a results based hiring process you’ll know at the point of hire what’s important to your admin employee and why they chose to work for you.   Veer too far away from their beliefs about who you are really, and the chances of an unexpected  turnover increase. And if you’ve found one of those high performing admin folks who simply wants to do a job and do it well with a stable source of income, your risk of an unexpected turnover goes down if you continue to provide them with steady work. But if you’ve hired someone looking for an opportunity to grow, you’d better make sure you give them those opportunities from time to time or they’ll likely find a reason to check out.

Stay connected to the “person” who is your employee.  

People’s lives change, and so do their needs for what they want from the “work” side of their lives. Stay close to your employee’s personal lives, paying attention to any issue that might change their job needs. When life gets a bit too dicey, be ready to offer short term part-time arrangements. When life needs an energy boost, a trip to attend a conference in New Orleans might do the trick.  A sudden health issue can change an employee’s need for expanded healthcare benefits or a pay increase so they can cover new out of pocket costs. The bottom-line you need to know who you are working with, not just what they do!

Build in opportunities to develop new skills, new work experiences.  

Your admin employee isn't just an admin so take them out of that box.  Admin employees in particular are often in roles filled with their share of work (i.e. tasks) that are more routine and boring than challenging and creative.  Many admin employees originally took those jobs because it involved work they could do - they were organized, they knew how to use all the Microsoft software, they were pleasant to be around. But landing an admin job they can do, doesn’t mean that’s where a talented admin employee wants to end up. Finding opportunities for members of your admin team to flex their career focused muscles, to learn new skills, to practice leading others on short or long term projects or initiatives are pieces of work you can give to your admin staff that will keep them active and engaged. And you might want to stop thinking of them as admins…and more as folks who can make important contributions to your company’s success. Better yet, organize your admin work so that it includes natural paths of advancement opportunity. An entry level receptionist, for example, should be able to advance into other roles – a team assistant, a project coordinator or even a project lead. If you’ve got a clear career path for members of your admin team, spell it out clearly. Also get really good at hiring at the entry level – knowing they will be employees you can count on to advance, always building from the bottom up. (These kind of “advancement” stories, by the way, are great recruiting tools.)

Play with job titles that actually reflect the employee’s real contribution.

And when one of your admin employees is doing work that goes well beyond the admin title, adjust their job title to reflect their contribution. Admin I, II and III are job titles that only make sense in an enterprise level organization where pay plans often dictate job titles. Not the case in a small to medium sized company where you have lots of room to develop the job titles that employees want – titles that reflect the value they have to the organization. Ask yourself in what areas your admin employee is making a difference and create an out of the box  job title that matches their contribution. How about Social Outreach Manager for someone who is executing your social media campaigns? How about Director of Business Execution for someone who is working in your back office making sure all your operational teams are working together?

Keep up with what’s going on with pay in your market.

Market competitive pay rates can shift quickly if you’re not looking at the market regularly and adjusting pay levels accordingly.  This is oftentimes tough to do with admin jobs where the actual duties and levels of responsibilities attached to a role can vary significantly from job to job, company to company.
If you have a question about what you should be paying for someone who does ________________________, give us a call and we’ll try to benchmark that work against what other companies in this market are paying for the same or similar type work.  Market competitive reviews of your pay plans for all job categories are critically important and should be done annually.

Believe what you’re being told.

Ask the right questions and your admin employee, any employee, will tell you what you need to know about where they are with respect to their job. Stay interviews have become increasingly popular over the last several years but they need to be for real – authentic discussions of “how are you feeling about your job right now” "Is there something a competitive employer might offer that would convince you to make a change?"  Know where you stand so you don’t have surprises.

Never take your admin employee for granted.

Just because a member of your admin team was willing to work some extra hours during a product launch, doesn’t mean they want to keep working at that level on the go forward.  Never take advantage of your admin employees sterling work ethic - any employee's sterling work ethic. Keep in mind a member of the admin team doesn’t always get to set the company’s agenda but is expected to respond to it. This means that your admin’s employee’s work life balance is always in some sort of ebb and flow and not always at their own direction. You can’t expect to keep your admin staff perpetually operating on the flow side of the ebb and flow and get their best performance.
And don’t forget to show your appreciation for everything your admin does -  even if deep down you believe its stuff in their job description. Showing appreciation, making sure your admin knows you see the link between their hard work and the results the organization enjoys, is worth its weight in gold.

Bring in a temp from time to time for some mental health relief.

You know that pile of paperwork over in the corner that your admin team never quite gets time to process?   That project you asked your admin to do "when they had time." Well, those stacks of paper, those projects that stay on the to do list forever, can be a really big source of stress for the conscientious people on your admin team. They hate not checking things off their to do list.  They hate boxes of paper sitting in the corner. Bringing in a temp every once in a while to do clean up projects, answer phones when things get super busy, or just cover work that tends to stack up on when someone is on leave or vacation, is a nice mental health thing to do for your admin team. Trust me, they will appreciate that you noticed!

How Can PACE Help?

First of all we can help by making sure your hiring process helps you identify the kind of admin employee who is the “right fit” for your team. That “right fit” is key to long term retention of any employee.  Admin employee’s, in particular, like to have some kind of affinity or personal connection with the people they work with .  That doesn’t mean they hang out for a beer after work, but it does mean that there needs to be a good match between an employee’s preferred work environment and team culture and what the employee will actually experience at work.  r. Our team can help you piece together the key factors impacting the type of candidate who will be the “right fit” for your team, plus help you source and then assess potential candidates to meet those requirements. And we don't see any two work environments the same, particularly thru the eyes of the admin staff who work in these environments.  Personal initiative for example, is a quality required for many admin roles while in others not so much, where a willingness to do things as directed is more valued. The employee’s communication style always makes a difference – some employees being really good at keeping others in the loop, others not so much. Which communication style works best for your team? Some admins are most effective when they can work alone with minimal interruptions while others thrive on ongoing interactions to keep them alert and productive.  Some admins love jobs with lots of details and prefer work environments with enough space to do high quality, no mistakes level of work. Others prefer a faster moving environment, where mistakes can be made and corrected quickly.
What we’re trying to say is that particularly for an admin employee a candidate’s work experience or hard skills are not the only factors that need to be considered when it comes to finding the "right" employee.  
Another way we can help is to do exit interviews with admin employees who have decided to leave their job. Finding out from the horses mouth why they decided to leave the stable, can be invaluable in profiling the right replacement candidate – what type of candidates to interview, which candidate is likely to be the right hire.  We are big fans of exit interviews, particularly for smaller employers who can’t afford to repeat past hiring mistakes.
PACE Staffing Network is one of the Puget Sound’s premier staffing /recruiting agencies and has been helping Northwest employers find and hire employees based on the “right fit” for over 45 years. A 5-time winner of the coveted “Best in Staffing” designation , PACE is ranked in the top 2% of staffing agencies nationwide based on annual surveys of customer satisfaction. PACE services include temporary and contract staffing, temp to hire auditionsdirect hire professional recruiting servicesEmployer of Record (payroll) services, and a large menu of candidate assessment services our clients can purchase a la carte. To learn more about how partnering with PACE will make a difference to how you find and hire employees,  contact our Partner Services and Solutions team at 425-637-3312, email us or visit our website. [gravityform id="56" title="false" description="false" ajax="false"]

Employee or 1099? Time to Take Another Look!

by Sara Bennett | March 6, 2024

0 Author-Sara, INFO/RESOURCES - FOR PEOPLE MANAGERS / HR PROFESSIONALS, Legal Issues get connected

New IRS regs require you to take another look at your 1099 workers. What you need to know!  

Most employers are not aware that independent workers make up nearly 45% of the US workforce. According to a 2023 report by MBO Partners, 72 million Americans go to work each day classified as independent contractors. 30 million of these folks do their work as 1099s in a full-time, every day capacity. Fortunately, or unfortunately, depending on your POV,  there are some new rules for how employers are allowed to classify a worker as a 1099 (non W2) worker that may impact your business in 2024. These rules were passed in early January but despite law suits from several states will go into effect now - March 11th, to be exact.  

Why Does the IRS Care About How You Classify a Worker? 

The IRS has always been interested in how employer's classify their workers because it directly impacts their tax revenue. Independent contractors are responsible for paying their own taxes, including self-employment taxes, whereas employers are responsible for paying their share of the payroll tax plus withhold the employee's share. Misclassifying workers as independent contractors when they should be employees can result in significant revenue loss for the government. The Washington State Department of Labor and the Employment Security Department also pay attention to worker classification issues because a W2 employee is entitled to certain wage and benefit protections that are not available to workers classified as independent contractors. When it comes time to make a claim for unemployment, a 1099 contractor is not typically eligible, but a W2 worker is. Yes, both state and federal levels of government have a vested interest in how you classify one of your workers.

A Brief History of Classification Rules

The distinction between independent contractors and W2 employees has historically been a talking point between employers and various regulatory bodies for as long as I can remember. From an IRS POV, its always been just a bit too easy for employers to misclassify a worker as an independent contractor to avoid the hassle and costs associated with payroll based taxes, benefit administration, and other administrative and fiduciary obligations that would normally be attached to a W2 employee. The IRS has a long history of inserting rules and "guidelines" for employers to use when establishing the "right classification. I remember when there were 20 factors the IRS felt employers should consider when making classification decisions. Somehow that got whittled down to 3 factors in 2021. In the 2024 guidelines, the IRS has added some new considerations, even referencing options for more, under a new "totality of circumstance" rationale.

What's Changed?

In 2021, the IRS established rules that put emphasis on the degree of control the employer exerted over the worker as the primary driver of worker classification. The 2024 adds additional considerations, requiring employers to take a second look at workers who they have formerly considered 1099s. Employers are now required to use what is called a "totality-of-the-circumstances" analysis, in which multiple factors are considered - all weighted equally. The key factors specified in the 2024 ruling include....
  • The degree to which the employer controls how the work is done - Who sets hours of work, when, where and how work is performed. This is not anything new.
  • The worker’s opportunity for profit or loss - Which requires the employer to get clear about who benefits when a worker's managerial skills impact the "profits" (or losses) generated from performing the work. For example, who controls the purchasing of the tools or equipment used to do the job? Does the worker have overhead requirements needed to perform the job that the employer does not control?
  • The amount and level of skill and initiative is required to do the work - What skills and initiative is required by the worker to complete the work assigned? The more independent the worker is from the employer's scrutiny of either the worker's skills or their personal qualities to perform the job, the more likely they are to be considered an independent contractor.  Interview them like you are hiring an employee and run the risk of mis-classification.
  • The degree of permanence of the working relationship - How long will the worker be attached to the workplace/company? The longer they work for a client, the closer the IRS scrutiny
  • The worker's investment in equipment or materials required to do the work - What are the tools the worker needs to bring to the table in order to complete the work assigned to them;  what tools belonging to the employer can the use without compromising their independence. This "who owns the tools" factor that has been around for a long time. A contractor using only the tools provided by an employer has never been a good look if the goal is demonstrate independence.
  • The extent to which the service rendered is an integral part of the employer's business - If the work performed is critical to the employer's principle business, it is generally considered integral to that business and supports the need to make the worker a W2 employee.

How Will these New IRS Rules Impact Local businesses? 

In the State of Washington, these rule changes are likely to require action from employers who have long standing relationships with workers formerly classified as "independent contractors". Up until recently, Washington, like several other states, has been using what is referred to as the ABC test to determine whether a worker should be classified as an independent contractor or an employee. The ABC test evaluates only three criteria: A) Is the worker free from the control and direction of the hiring entity, B) Is the the work performed outside the usual course of the hiring entity’s business, and C) Is the the worker is engaged in an independently established trade, occupation, or business. We are assuming that certain workers who can meet these ABC requirements might fall short under the new rules. It surely means that for employers who regularly use independent contractors, it's time to re-look at current documents, agreements and contracts to make sure the terms of engagement are clearly spelled out and in sync with the new regs. At minimum any agreement with an IC needs to spell out...
  • The nature of the work. What results or deliverables are key to the agreement
  • What each party will do or provide as part of the agreement - eliminating as much as possible any obligation by the client to provide tools or equipment necessary to do the work.
  • Payment Terms. Clear outlines of how and when the contractor will be paid for services rendered. Hourly pay agreements are generally not considered favorable to claims of "independence."
  • The Client/Contractor relationship - clearly specifying their independence of one another.
It also means that employers need to maintain accurate records of payments to independent contractors. This includes invoices, receipts, and any other relevant documentation.
In summary, for Washington employers who rely on the use of independent contractors or freelancers on a regular basis, understanding and adhering to the new "totality of circumstance" classification guidelines is critical to avoid potential penalties and issues with misclassification. 

What Happens If You're Audited for Misclassification Issues.

Not to be scary, but we know that an unfavorable misclassification audit can be costly. Not only is an employer subject to unpaid back taxes (and some cases penalties), you might also be liable for the payment of back wages due to being out of compliance with minimum wage and/or overtime pay requirements.   

What Can You Do?  

I recently chatted with the owner of a marketing firm in downtown Seattle who was concerned about the growing number of 1099 contractors who had been added to their firm's "bench list" over the last 6 months. Their bench included copy writers and digital designers who worked on various client projects from time to time but not at a level consistent enough to warrant making them even a part time W2 employee. She had been paying them as 1099 contractors whenever they got assigned to a project as her way to contain her level of financial commitment to her "just in time" workforce. She considered this type of flexible staffing strategy to be key to her business model. Preparing herself for a potential audit given her growing use of 1099s, her goals was to keep her "bench" concept in tact, but do so by avoiding the risk of IRS insertion. We discussed her options which included... Requiring any worker assigned to a project to be paid as a W2 employee, in essence prohibiting the use of 1099 contractors on all client projects. This solution avoided IRS scrutiny altogether, but also required her to absorb the extra work and costs it would take to formally hire each worker assigned to a project -even when the workers actual hours of work turned out to be much less than originally anticipated. She was anticipating a lot of hiring and quitting, and lots of paperwork that would accompany those activities. We talked about whether or not this was a staffing alternative that made business sense given the extra liabilities she would assume to provide these interim workers with W2 driven benefits - both those that are mandated by the State of Washington and or part of their current benefit offering to all W2 employees. She, like most employers attached to these types of flexible staffing models, resisted the idea of incurring the process costs of hiring someone for an unspecified amount of interim work, recognizing it would more than likely slow down her ability to deliver services to her clients in the timeframes required. We discussed the option of using an Employer of Record (EoR) Service provider (like PACE) to automatically convert all their current 1099  workers to W2 status, but as employees of a co-employer partner, not their own. By finding an EoR partner she could outsource all the steps of hiring and onboarding to a third party plus ensure that the IRS would never come calling about any misclassification, as all workers would be made the W2 employees of a third party staffing partner. I reminded her that EoR services differed from more traditional payroll service options in that in an EoR service relationship your "partner" doesn't just calculate and deliver a paycheck to your worker, but does everything necessary to be formerly recognized by the IRS and state regulatory agencies as their "employer of record" - thereby eliminating any hidden costs related to the employer liability. In the end, she elected to use our EoR service model, customizing its execution so that each hour of work performed by one of her former 1099 workers would not only be attached to our W2 employee's payroll record, but would be used to track work performed to a unique project code. We made some simple changes to our current automated time tracking system that required each employee to submit their hours of work not just by date they were performed by but work type and project code, allowing  PACE to provide weekly reports of pay and potential client billing back up.  Our ability to customize this payroll process to add value to our client's pricing and billing model was clearly a plus! PACE has been offering Employer of Record services to our client base for more than a decade, starting during that time after 2008 when worker classification issues first started to get serious IRS attention.   One of our clients has been using our EoR service model on an ongoing basis for over 6 years, asking us to hire, onboard and assignment over 200 professional workers each year.  These employees would get assigned to a variety of service projects on an interim, hourly basis throughout the year. Again we can deliver our client reports of the payroll costs attached to each project, each type of work performed by their 200 workers who are now our employees. We believe our EoR service option has delivered significant value to this employer or any employer who has an ongoing need for interim workers who they can easily source on their own but need to get to work quickly and efficiently while operating in an IRS  compliant way.

Using EoR Services to Manage an Out of State Employment Arrangement

Another set of clients have used our EoR services to maintain a W2 working relationship with valued employees who would have otherwise been forced to terminate their employment given their family's decision to move out of State. These employees were open to continuing to work remotely, so, rather than our client going thru the costs and hassle of establishing a nexus with another State's  workers comp and employer services regulatory bodies, they elected to use our EoR service model so that we became their employee's W2 based employer of record.  In each case we already had established a payroll based nexus with that State allowing our clients to smoothly and seamlessly retain a valued employee despite their physical relocation.      

How PACE Can Help?

At PACE, we understand the challenges of managing worker flexibility while also staying compliant with regulations that are frequently changed or adjusted at either the State or Federal level.  Our Employer of Record (EOR) services offer a solution for businesses seeking to engage workers in flexible work arrangements while mitigating the risk of IRS insertion.  By serving as the official W-2 employer for tax and legal purposes, handling all payroll, benefits administration, and compliance requirements, our clients can stay focused on their core business activities, not having to worry that they will trigger an IRS sniff check! Transitioning a long term 1099 worker into a W2 employee role also is a win for the independent contractor, providing them with greater financial stability (they get paid weekly) legal protections, and access to benefits they otherwise would not be able to tap into in their 1099 format.  Ultimately, we have used the EoR service model to support a more positive and risk free employment relationship for both our client and their worker. In a typical E of R service process PACE....
  • Streamlines the onboarding process including all compliance requirements 
  • Collects timecards and pays all workers weekly
  • Administers all mandated and voluntary benefit offerings
  • Manages rate of pay agreements
  • Submits pay and tax reports to regulatory agencies 
  • Processes annual W2 preparation and follow up  
  • Oversites all state regulatory requirements including responding to claims of unemployment benefits
Mark ups over bill rates for EoR services are nominal and typically decrease as the volume of employees covered under an EoR service agreement increases. PACE Staffing Network is one of the Puget Sound’s premier staffing /recruiting agencies and has been helping Northwest employers find and hire high impact employees based on the “right fit” for over 45 years. A 5-time winner of the coveted “Best in Staffing” designation , PACE is ranked in the top 2% of staffing agencies nationwide based on annual surveys of customer satisfaction. PACE services include temporary and contract staffing, temp to hire auditionsdirect hire professional recruiting servicesEmployer of Record (payroll) services, and a large menu of candidate assessment services our clients can purchase a la carte.

If you’re a hiring manager looking for a service that will actually “make a difference” to who and how you hire, contact us at 425-637-3312 or fill out this form and we’ll be in touch

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