LOCAL NEWS AND TRENDS – EMPLOYMENT, STAFFING

Staffing Company Clients are Messaging Record Breaking Dissatisfaction with their Staffing Providers

by Jeanne Knutzen | November 10, 2015

0 Blog, INFO AND RESOURCES FOR EMPLOYERS, What's New in Staffing? Client Ratings Staffing Services, User Report Staffing Services, User Satisfaction Staffing Services

In an industry wide study of “user satisfaction” industry specialized pollster, Inavero, revealed that buyers’ satisfaction with staffing firm services (overall) had not only fallen sharply from last year’s ratings, but in several categories had reached all time lows. … Read More »

Message to Seattle’s Hiring Managers – What to Expect in 2016!

by Jeanne Knutzen | November 9, 2015

0 Blog, INFO AND RESOURCES FOR EMPLOYERS, What's New in Staffing? Staffing Trends, Staffing Trends 2016, Staffing Trends Seattle

With the tightened candidate market being the key issue facing most hiring managers in 2015, our clients are already asking what lies ahead in 2016. … Read More »

What’s in a Name? 5 New Titles to Replace HR

by Guest Author | November 4, 2015

0 Blog, INFO AND RESOURCES FOR EMPLOYERS, What's New in Staffing?

HR roles are drastically different from what they were even 10 years ago, thanks to remote workforces, digitally savvy job applicants, and constant connectivity. … Read More »

You Need an Employee Commitment Strategy

by Guest Author | November 3, 2015

0 Blog, INFO AND RESOURCES FOR EMPLOYERS, What's New in Staffing?

In developing an employee commitment strategy, you will not only be able to gauge but also increase commitment levels and ensure the long term commitment of your employees to your organization. … Read More »

People Really Are Your Most Important Asset

by Guest Author | August 11, 2015

0 Blog, What's New in Staffing? asset, assets, employers

The assets that people create, accumulate, and sustain utilizing their knowledge, experience, and skills—as well as the people themselves—can be defined as intellectual capital (IC). By analyzing and valuating the IC of an organization, investors, candidates, business leaders, and others can more accurately assess today’s businesses. … Read More »

A Candidate Driven Marketplace

by Jeanne Knutzen | July 21, 2015

0 Blog, Hiring.Best Practices, What's New in Staffing? candidates, Seattle Staffing, staffing agencies seattle

Hiring has been a priority element of many company’s business plans since the middle of 2014, but employers continue to struggle meeting their staffing goals. Needs for operational, managerial, technical and professional staff are going unfilled for longer and longer periods of time, in many cases having a significant impact on business or service performance. … Read More »

Transparent Wage Policies: Honest or Chaos Provoking?

by Jeanne Knutzen | January 9, 2015

0 Blog, INFO AND RESOURCES FOR EMPLOYERS, Legal Issues - Staffing, Temporary Staffing.Best Practices, What's New in Staffing?

A common policy found in many businesses is a prohibition against the disclosure of wage information. This type of policy serves the purpose of preventing workers from battling with HR and each other over who is getting paid what and why. … Read More »

47 is the NEW 40!

by Jeanne Knutzen | September 3, 2014

0 Blog, What's New in Staffing? Employment Agency Bellevue, Employment Agency Everett, Employment Agency Kent, Employment Agency Seattle, Employment Agency Tacoma, Employment Agency Washington State, Hiring Bellevue, Hiring Everett, Hiring Seattle, Hiring Tacoma, Temporary Staffing Bellevue, Temporary Staffing Everett, Temporary Staffing Kent, Temporary Staffing Seattle, Temporary Staffing Tacoma, Temporary Staffing Washington

The 2013.14 Gallup Work and Education Survey (just released) suggests that the average number of hours worked a week by US employees is almost one day more than the 40 hours typically considered full time. In fact, only 42% of the employees reported working only 40 hours—with 47 hours being the average of the 1,271 adults polled. While 39% reported they worked more than 50 hours a week, with 18% reporting their work week got stretched to 60 hours or more. While 40 hours is widely regarded as the standard for full time employment, salaried employees reported working an average of 49 hours a week, while hourly employees reported working an average of 44 hours per week. Our readers should note that the hours of work reported were based on employee’s self reports—not data pulled from payroll records. Our experience is that employees typically over estimate the number of hours they actually work each week. Issues with self reporting set aside, it is clear that the 47 hour/week average is clearly the perceptual norm—being the consistent average being reported by the Gallup survey for well over a decade. While most state and federal employment laws define full time employment as 40 hours/week, the ACA defines full time employment as 30 or more hours/week—that point where the employer’s mandate to provide healthcare benefits kicks in. Critics of the ACA are predicting that more employees formerly considered full time will be converted to part-time status to avoid benefit eligibility. The Gallup poll noted that in their study, 43% of the employees polled were employed full time, down from 50% reported prior to 2007 and the “Great Recession.”

Seattle’s New Minimum Wage – Like It? Follow It!

by Jeanne Knutzen | July 15, 2014

0 Blog, What's New in Staffing? Employee Seattle Sick and Safe, Employment Agency Seattle, jobs seattle, Minimum Wage in Seattle, Seattle Staffing Agency, temporary agency Seattle, Temporary Employee Pay Rates Seattle, Temporary Employees Seattle, Temporary Staffing Seattle

Seattle is once again leading the way on issues designed to improve employee work life! Two years ago, Seattle Sick and Safe required employers to provide employees with up to 9 days a year of paid time off for personal or family health or abuse issues. This June, the Seattle City Council voted to move forward with the plan to increase the minimum wage for Seattle employees to $15/hr. The implementation of the new minimum wage will be phased in. In April of next year, minimum pay rates will increase from $9.32/hr. to either $10 or $11/hr. depending on whether you are (or work for) a large or small employer (differentiated by more or less than 500 employees). By January of 2017, all large Seattle employers must meet the $15/hr. minimum wage, unless they offer healthcare benefits, in which case they can delay the $15/hr. pay minimum until the following year. Small employers (less than 500 workers) have until January 2021 to meet the new minimum wage standard. In charted format, here’s an overview of Seattle’s phase in plan: While most of the questions about the short and long term impact of minimum wage adjustments are unknown, critics of Seattle’s $7/hr. minimum wage increase continue to make the case that the actual economic impact of the wage adjustment will actually hurt the very employee populations the mandates are targeted to help. They argue that as increased wages kick in, pay gains will be offset by increased costs of goods and services. Or put another way, while improving “acceptable pay,” the underlying issues of affordable city living and the declining skillsets of US workers largely go unaddressed. They also worry about the employer’s changed motivation to fuel job creation or hiring in all areas directly (or indirectly) impacted by increases in minimum pay rates. As employees start to enjoy the benefits of more pay and purchasing power, the longer term impact on job availability and security may end up being the price paid. Both employers and employees will need to wait - to see! Anticipating impact to my own industry, staffing, I see both positives and negatives. While overtime opportunities for core employees will likely be reduced if not eliminated, there will be an offsetting need for more flexible or cyclically scheduled employees - a positive. But for those segments of the temporary help industries that employ large numbers of low skilled, low cost, entry level workers, and the landscape could be quite different. With both “temps” and “core workers” now being paid the same, some of the cost containment advantages of using unskilled “temporary employees” for beginning/entry level roles will go away, changing the hiring patterns of staffing industry customers. As for the predicted job loss, we've already heard the stories of Seattle based companies who are moving their facilities out of the costly Seattle corridor. In some cases we see companies relocating themselves into more rural communities, away from the influence of Seattle’s wage and benefit mandates. Some of these moves are a matter of survival. Companies who compete directly with third world labor pools are always impacted by changes in mandated pay and benefit programs. There is no question that the staffing (recruiting and retention) strategies of both Seattle employers and employees located in nearby employment communities, will change. Whether you are a large or small employer, located in Seattle or Bothell, you are competing for employees from the same labor pools. Pay and benefit plans must remain competitive. Unfortunately it will be increasingly difficult for employers to find a safe haven from the influence of government pay and benefit mandates. With all the good intentions of making living in their city “affordable” or to ensure “compassionate” treatment of employees in need, many city councils in and outside the state of Washington are looking closely at similar wage and benefit adjustments. With Seattle just unseating San Francisco as city with the highest minimum wage in the nation - other cities, including San Francisco, are not far behind. And if the cities aren't budging, chances are the states will. Massachusetts set an $11/hr. minimum wage to kick in 2015. Earlier this year, Minnesota raised its guaranteed wage by over $3/hr. California, Connecticut and Maryland have all passed laws increasing their respective wages to $10 or more in coming years. As for federal level influence on minimum wage, the Obama administration has been a serious advocate of raising the minimum wage since 2008 when they inherited a $7.25/hr. minimum wage. Lacking congressional support for federal level minimum wage increases, President Obama recently used an Executive Order to increase minimum pay to slightly over $10/hr. for federal contractors – a gesture with primarily symbolic impact. Neither Canada, Germany, Mexico nor China have national minimum wage programs, preferring instead to let local governments set pay in line with local costs of living that can vary dramatically. To date Australia has the highest global minimum wage of $16.88/hr. Compare that with China, where typical minimum wage mandates hover around a U.S. equivalent of less than a dollar an hour. One thing is sure – the real impact of Seattle’s minimum wage mandates will be revealed over time. Never in the history of either State or local mandates have minimum wage increases approached the level being put in place over the next 3 years.

The ACA and Employer Mandates. They’re Back!

by Jeanne Knutzen | May 22, 2014

0 ACA Affordable Healthcare, Blog, What's New in Staffing? Affordable Care Act, Affordable Healthcare – ACA Smart, Seattle Staffing, Seattle Staffing Agency, staffing services bellevue, staffing services tacoma, Temporary Employee

Are You Ready?  

With the first tier of the “postponed” ACA employer mandates just around the corner, (January 1, 2015), large employers (defined as employers with 100 or more employees) are once again getting poised to offer healthcare insurance to their eligible workforce or be subject to penalties. This time the requirement is that 70% of their eligible employees need to be offered coverage – a slight break to account for issues with Medicaid eligible employees. Less large employers (defined as employers with 50-99 employees) have until January 2016 for the employer mandates to kick in.

It has been a long winding road getting us to this place with regulatory guidance filled with potholes of uncertainty and confusion. There are over 15,000 pages of rules and another 45,000 pages of guidance. The delay in the employer mandate gave regulators one more year to clarify their intent, and those of us in the staffing industry one more year to prepare ourselves and our clients for what lies ahead. Most of us are just now getting back into the ACA saddle. With the new deadline only six months away, we need to start our readiness count down now!

As a context for our clients with large flexible workforces, there are several unique features of the ACA that are specific to the staffing industry and need to be shared with our customers as part of their readiness process. We are subject to the law as are all employers - but the difference is that most staffing companies have further to go to become compliant. As an industry we have never been benefit rich. Our workforces are short lived and transient, with most employees coming to us for interim work, with no expectation of benefits. The low levels of healthcare insurance specifically written for staffing companies fall well below ACA minimums and are being discontinued as we speak. The ACA will significantly impact our cost structures whether we elect to pay or play.

Your staffing provider faces three big challenges which hopefully by now they are discussing with you.  They face the challenge of 1) new cost structures that are likely not absorbable, 2) limited access to insurance solutions that fit the needs and requirements of flexible workers, and 3) an enormous amount of new administrative complexity. Not all staffing companies will have the capacity to comply with the new ACA regs, even if they wanted to.

Most of our issues as well as some of our customers revolve around issues of employee eligibility – who is and who is not eligible to receive benefits. Our employees work for our clients in so many different ways – short, long term assignments, full time, part time, auditioning for hire, project work, day labor – it is hard to get our arms around who will not be considered full time, eligible for benefit coverage at point of hire.

In the last three months, regulators have offered several new employee classifications that are exempt from ACA mandated coverage:

Seasonal Employees – employees who have been hired into positions where the customary duration of the job is six months. Agriculture, retail, and other highly cyclical industries will not be required to offer coverage to employees who meet the “seasonal” requirements.

Part Time Employees – employees who work less than 30 hours a week. While some employers, like Home Depot and Trader Joes, have announced plans to cut back the hours of work for all their part time staff to contain their benefit costs, other employers like Starbucks, Costco etc. have renewed their commitment to provide benefits to their large and loyal part time workers.

For staffing companies and their customers, greater attention must be given to nailing down the actual number of hours our employees will be required to work each week so as to properly classify them as part or full time employees. An employee’s classification as either full or part time while working on assignment can impact your bill rate your staffing provider has to charge you just to cover increased costs!

“Variable Hour” Employees – are employees whose hours of work or the duration of their  ongoing work assignments are such that we cannot be “assured” they will average 30 hours of work each week for the number of weeks in the “measurement period” used to baseline the employee's work patterns. Measurement periods can vary from no less than 3 months to no more than 12. Most employers will elect the 12 month measurement period option.

The "variable hour" employees is the classification most applicable to staffing company employees but is also the most difficult to administrate. While on the surface most temp and contract workers are by definition “variable,” the IRS requires the staffing agency to classify each employee as either “full time” or “variable hour” at the time of hire, considering several factors which they have listed in examples and regulatory comment.

Get it wrong and not offer benefits when you should, your staffing company can face serious penalties. Get it wrong and offer benefits not required, and your staffing company's costs can sky rocket, making significant price increases to you, a given.

The gain for both you and your staffing provider comes when employees can legitimately be classified as "variable hour" employees because of the unique position they have under the ACA mandates. Employers are not required to offer variable hour employee's healthcare benefits until their “measurement” period is completed – which can be a delay of up to 13 months. The “variable hour” employee provision can be used to contain costs but only if specific administrative and eligibility requirements are met at the point of hire.

At minimum, employers should expect their staffing providers to work with them to make changes in how they place requests for staff. In the bigger picture, it is more important than ever for employers and their staffing providers to work together to ensure ACA compliance while keeping a sharp eye on ways to contain unnecessary costs!       

Jeanne-KnutzenThe PACE Staffing Network is a network based recruiting and staffing company headquartered in the Pacific Northwest with particular expertise in the development and management of flexible workforce strategies. The ACA is of particular interest to us because of its projected impact on workforce organization and cost containment strategies.  Our goal is to help employers become ACA compliant while taking full advantage of the special provisions of the law that can provide competitive advantage. For more information on the ACA and its impact on your company contact us at 425-637-3312 or e-mail us at infodesk@pacestaffing.com.

This article was written by Jeanne Knutzen, founder and CEO of the PACE Staffing Network.

Recruiting Metrics – Staffing Style

by Jeanne Knutzen | May 13, 2014

0 Blog, What's New in Staffing? healthcare placement, healthcare recruiting, Healthcare staffing, IT Staffing, Seattle Recruiting, Seattle Staffing Agency, staffing, Staffing Agency

Healthcare, IT, Creative, Other

Each year InsightSquared, a business analytics company, and Staffing Industry Analysts, publishes a report of recruiting metrics for the staffing industry.

Their last report was published in June 2013, showing data from 200 staffing firms generated between 5/1/2012 and 4/30/2013 – approximately one year of placement data, over 30,000 individual placement records.

Their report covers two key metrics:

  1. Fill Ratio – of orders taken that were successfully filled, and
  2. Time-to-Fill (some call it Cycle Time) – the number of days it takes to fill an order (from point of req to hiring decision).

Both metric types were analyzed by two types of placements:

  1. Contract/Temporary Placements
  2. Permanent or Direct Hire Placements

The industry segments studied were a cross section of IT, Healthcare and Life Sciences, Media/Advertising/Creative and Other.

For those of you who want an idea of how your internal recruiting services compare to typical staffing industry metrics, here are the highlights of the 2013 staffing metrics you can use for comparison.

1. Across all industry segments, the Average Fill Ratio was:

  • 34% = Temp/Contract Placements
  • 22% = Permanent Placements

The segment with the highest ratios of fill were Healthcare and Life Sciences; 63% for temp/contract placements and 27% for Permanent placements. The lowest ratios of fill came out of the IT segment where only 28% of contract reqs were filled and 22% of direct hire reqs.

2. Across all industry segments, the Average Time-to-Fill (number of days required to fill a job order) was:

  • 46 Days = Temp/Contract Placements
  • 75 Days = Permanent Placements

The segment showing the longest “time-to-fill” was Healthcare and Life Sciences; 66 days for temporary/contract placements and 158 days for Permanent placements.  Media and Advertising talent had an average of 21 days for contract staff and 53 days for permanent staff.

Because we (the PACE Staffing Network) do so much work in the healthcare market, we paid attention to the unique recruiting stats for Healthcare and Life Sciences. We think there may be two factors in play that are impacting just how much outside the norm this market segment performs:

  • The healthcare industry has unique recruiting requirements (many high level and “hard to find” professional level requirements), which requires tightly engineered staffing processes and requirements – not required by other segments of staffing, and in some ways limiting the number of staffing companies operating in that field.
  • The purchasing models used in many healthcare organizations is based on valued, trusted and committed relationships between hiring managers, “favorite” vendors” and “hard to find” talent. This is oftentimes very different from the more transaction focused purchasing models used in other areas of staffing. Purchasing models based on one off relationships between hiring managers and vendors can change the staffing landscape considerably – driving up both fill times and fill ratios. Fewer staffing vendors, all with strong relationships with decision makers, is a scenario that can get translated into more fills per vendor, with decision makers more willing to wait for their favorite vendor to deliver the trusted talent they need.

The PACE Staffing Network has been servicing the healthcare industry for over 20 years. Our expertise in recruiting the specialized non-clinical candidates needed for hospitals, clinics, physician groups, surgical centers, etc. and creating networks of clinical recruiters and vendors working in niched areas of healthcare offers a unique one stop service delivery model for busy administrators and HR teams. Our focus is on improving your fill ratios and lowering your fill times, all while ensuring that every step in your compliance process is carefully managed. For more information on our recruiting networks, contain Nancy Swanson, our VP of Partnership Development at 425-454-1075 ext. 3010 or email Nancy at nancys@pacestaffing.com. You can also visit us online at www.pacestaffing.com.

Top 10 Challenges for Recruiters – 2014

by Jeanne Knutzen | April 10, 2014

0 Blog, What's New in Staffing? Recruiting, Recruiting Challenges, Seattle Recruiting, Seattle Staffing, Seattle Staffing Agency, staffing, Staffing Agency

The following article is an edited version of an article written by Dr. John Sullivan for the ERE Daily on Monday, April 7th, 2014. Those who follow my articles know that I frequently write on the positive trends and big ideas that I think recruiting leaders need to be aware of. I don’t often write about challenges or problems believing that most of us don’t want to dwell on the negative. Since I am predicting that during the next few years we will encounter a completely transformed world of recruiting, it only makes sense to shift our conversation and focus on our upcoming challenges. If recruiters aren’t prepared to mitigate these challenges, they may grow out of control, causing exponential damage to your company and its performance. The Top 10 – in order of priority: 1. Not being prepared for the return of intense recruiting competition. With so many jobless individuals applying for every open position, it has been easy for recruiters and hiring managers to pick and choose from numerous applicants. Recruiting was a relatively easy process. As the economy improves, the power in the recruiting relationship will inevitably shift away from the corporation to the job seeker – changing the “ease” with which the recruiting function can be executed. Most corporate recruiting functions simply aren’t ready for a return to intense competition for candidates. The primarily “active” recruiting approaches that have worked and dominated over the last handful of years will simply fail when the focus shifts to fighting over prospects and candidates. And the “war for talent” will be even more challenging if recruiting resources are short. 2. The increased volume of open positions will overload the recruiting system. In addition to having to fight for individual talent, an increase in the volume of hiring will further stress most existing recruiting systems to the limit. Obviously as corporate growth increases, so will the hiring volume. Challenges retaining talent will further increase that hiring volume. Last year alone, corporate turnover increased by 45% and I am predicting a similar increase for this year and next. Turnover will increase because as the job market opens up in specific industries, regions, and technical jobs, many employees who have been focusing on job security will begin to realize that it’s time to move on. Because most corporate retention teams have been completely decimated and retention approaches not updated, corporate efforts to prevent this increased turnover will have little impact. For recruiting leaders this means that the combination of new corporate growth and high employee turnover will dramatically increase the volume of open positions beyond their capacity to produce the results needed. 3. Rusty hiring managers and underdeveloped recruiters have diminished capabilities. A low volume of hiring and the lack of competition may have caused the capabilities of your hiring managers and recruiters to degrade significantly. Adding to that condition the fact that there has been little money for development or training for either recruiters or managers will mean that in growth mode both are likely to initially stumble under this new environment. 4. A lack of speed will restrict your results. The business world moves much faster today than it did during the last recruiting boom. Unfortunately, recruiting hasn’t maintained its speed capability due to fewer resources, a lack of competition, and less focus on “time to hire” statistics. When top candidates have multiple offers, they simply won’t be around when indecisive managers finally make their hiring decision. In a newly competitive and faster moving world, delays in hiring will be costly, and unfortunately, reducing time to hire is one of the most difficult objectives to achieve within recruiting. 5. Long Ignored employer brands will begin to negatively impact recruiting effectiveness. In a down economy, with applicant surpluses, recruiting leaders did not pay much attention to their external employer brand image. Few have taken the time to measure their employer brands, and as a result, recruiting leaders often don’t realize how their “talent failures” (including layoffs, pay cuts, promotional freezes, etc.) have hurt their employer brand image. Once competition for top talent becomes intense, leaders will realize that a weak Internet or social media employer brand will prevent top talent and innovators from even considering applying at your firm. Unfortunately, most recruiting leaders define employer branding incorrectly and rebuilding an employer brand is both time consuming and expensive. 6. Your current recruiting process may not have the capability of recruiting innovators. One of the things that executives have learned from the success of firms like Google and Apple is the value of innovation and innovative employees. Unfortunately, most recruiting processes are not designed to effectively identify or recruit innovators who expect to see innovation and technology as an integral part of the hiring process. Without a strong employer brand and a separate sub-process designed specifically for recruiting innovators, the chance of recruiting a top industry innovator to your firm may approach zero. 7. Your recruiting strategy may be years out of date. Obviously without the direction provided by a strategic plan, your firm may suffer several years of weak results. Surprisingly, most recruiting functions actually operate without any written and distributed recruiting strategy. But even if you have a strategy, it is rarely updated to meet the needs of a new and much more intense global recruiting market. The strategy must also include a competitive analysis of your recruiting competitors to ensure that your firm’s strategy and approach produces superior results and a measurable competitive advantage. 8. Antiquated recruiting metrics lower your credibility with executives. Whether you have a seat at the table or not, recruiting leaders simply will not be listened to and funded unless they have the right metrics to quantify the dollar impact that high-performing new hires have on corporate revenue. And of course the biggest corporate metric omission is the failure of the majority of firms to accurately measure the quality of hire. As a result, few corporate recruiting functions can convincingly prove that they hire top performers and innovators with advanced skills and high retention rates. Only a handful of functions have predictive metrics that are necessary in order to alert recruiters and hiring managers about upcoming recruiting issues and opportunities. 9. A shortage of effective recruiters is on the horizon. Everyone knows that this long period with a down economy has decimated the ranks of corporate recruiters. Many of those who were laid off have left the profession. And the bad taste that it left in their mouths may cause most never to return. Since there are no college programs that turnout recruiters, recruiting leaders need to prepare for the time when competition for top recruiters will become intense. Existing employed recruiters will be in such a demand that they will be “bid on” by other firms, and finding effective replacement recruiters on the open market will be extremely difficult and expensive. Training new recruiters themselves may be the only effective option available to many firms. 10. The lack of recruiting resources. Unless you work at Google, the odds are that your function has already suffered numerous dramatic budget cuts over the last several years. You’re going to need a significantly higher budget if you expect to have a reasonable chance to increase your employer brand, recruiting volume, recruiting speed, and quality of hire. Unfortunately, most recruiting leaders simply don’t have the capability of building a strong business case that quantifies the tremendous dollar impact that recruiting has on corporate revenue and results. Additional Challenges  There are several additional strategic problems that didn’t make the list, because I determined that even though they are important, they had a lower impact. But since every industry and company faces unique problems, add your unique problems to your “keep an eye on list.”

  • The new Internet and social media approaches need to be assessed in terms of their potential to enhance recruiting results.
  • The globalization of the talent marketplace.
  • The high volume recruiting technologies need to be assessed in order to find the very few that really impact quality-of-hire results.
  • Employment-related legislation. The rights of applicants in all countries will likely increase.
  • Increasing pressure to separate recruiting, retention, and onboarding from the rest of HR.
Final Thoughts Although it’s certainly more fun to explore new opportunities in recruiting, failing to identify and resolve existing recruiting problems may actually have a larger negative impact on both long term and short term results. Almost everyone is aware of the tactical day-to-day problems in recruiting, but very few recruiting leaders take the time to forecast strategic “big picture” problems that are on the horizon. If you are a corporate recruiting leader, I hope my “biggest-challenges list” at least started you to think about the major shifts that are ahead in recruiting and the problems that will occur as a result of them. Dr. John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations. He’s a prolific author with over 900 articles and 10 books covering all areas of Talent Management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations / organizations in 30 countries on all 6 continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR and the Financial Times. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring”, Staffing.org called him “the father of HR metrics” and SHRM called him “One of the industries most respected strategists”. He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked #8 among the top 25 online influencers in Talent Management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on www.ERE.Net. He lives in Pacifica, California.

A Quick Look At Flexible Staffing Strategies 2009-2014

by Jeanne Knutzen | April 2, 2014

0 Blog, What's New in Staffing? contract staffing, contract worker, Job Growth, Seattle Staffing, Seattle Staffing Agency, Temp to hire, temp worker, temporary agencies, Temporary Staffing

As we have been reporting for the last several years, the “industry category” that has been consistently growing since the 2007 recession ended is the “temporary help” industry, which includes employees of agencies providing temp and contract workers to employers. Current indicators suggest that this trend will continue into 2014, with the Department of Labor projecting that the number of flexible employees who work in short term temporary jobs will grow at double the rate of core jobs over the next decade. In the years between 2009 and 2013, “temps and contract” workers accounted for 15% of all job growth in the US. In 2013, 2.9 million people worked in temporary roles, representing an increase of 28% since 2010 compared to a 5% growth rate for all other jobs. In many regions across the country, the share of job growth credited to temporary and contract jobs were even more significant. In Cincinnati, for example, the increased number of temp and contract workers accounted for over 65% of overall job growth, 51% in Milwaukee, 46% in Kansas City, and 40% in both Chicago and Philadelphia. In fact in most metro areas of the US, a significant percentage of local market job growth came from temporary or contract jobs. According to a recent Career Builder survey, the temporary/contract jobs that will grow at the highest rate in 2014 will be:

  • Human Resource Specialists, which is a job category that will grow by 4%, representing the folks the temporary help industry hires to provide services to their clients. Average earnings for these HR professionals are targeted to be close to $27/hr.
  • Customer Service Reps will grow by 3%, with an average pay rate of $14.70/hr.
  • Admin Assistants will grow by 3%, with an average pay rate of $15.58/hr.
  • Help Desk personnel will grow by 3%, with an average pay rate of $22.32/hr.
Other temporary job categories scheduled to grow by 3% or more include Construction Workers, Registered Nurses, Bookkeeping or Accounting Clerks, Maintenance and Repair Workers, Inspectors/Testers, Truck Drivers, Machinists, and Sales Reps... which speaks to the growing diversity of the new flexible workforces. NancyA different Career Builder survey found that 42% of employers plan to use (more) temporary and contract workers in 2014, with 43% intending to hire their temporary employees into full time permanent staff. The “temp to hire” employee auditioning strategy is definitely alive and well. There is no question that since our last recession, the growth in flexible workforces and the staffing strategies that are creating them has far outpaced the growth in core employment. This trend is targeted to continue and suggests the need for employers to expand their use of flexible workforce strategies as a way to stay competitive both in terms of costs and profits. The drivers of this shift to workforce flexibility are the usual culprits—the need to optimize workforce productivity, to lower fixed operating costs, and to move quickly and nimbly in volatile markets. For more information about how to create a temporary workforce, and/or develop or apply flexible workforce strategies in your work environment, contact our Vice President of Partnership Development at nancys@pacestaffing.com or call Nancy Swanson at 425-454-1075 ext. 3010.

Do You Know…

by Jeanne Knutzen | August 14, 2013

0 Blog, What's New in Staffing? CareerBuilder, Compensation, Seattle Staffing, Seattle Temporary Staffing, Staffing & Recruiting Pulse Survey, Staffing Agency, Staffing Companies, Temporary Employees

The percentage of job offers made to new candidates that get turned down because of compensation related issues? According to CareerBuilder's recent Staffing & Recruiting Pulse Survey, approximately two thirds (67 percent) of a candidates' salary expectations exceed the employers' offers. This data is gathered from offers made via staffing companies and represents an increase of 6 percentage points over last year. It should come as no surprise that compensation was among the top reasons candidates turned down offers in the last year, but also one of the main reasons why employees changed jobs.

What Our Clients Need to Know About the Affordable Care Act

by Jeanne Knutzen | June 28, 2013

0 ACA Affordable Healthcare, Blog, Healthcare Staffing, What's New in Staffing? Affordable Care Act, Affordable Healthcare – ACA Smart, American Staffing Association, ASA, Benefits, Healthcare, Seattle Staffing, Seattle Temporary Staffing, Temporary Staffing

What two years ago seemed like an event too far off to care about, the launch of the Affordable Care Act (ACA) this coming January 1st is now just around the corner. While there are still significant gaps in the clarity needed to fully comply with the 2700+ page law,  we now know that most of the regulations that are going to be activated in January have been written. It’s now time for employers to make decisions about how they will comply with the key provisions of the Affordable Care Act. Because we are still hearing our client’s asking questions about the basic components of the law, we wanted to share information provided to us by our national trade association, the ASA (American Staffing Association), which we think does a good job of outlining the key elements of the ACA and what it means to our clients. Since the staffing industry is significantly impacted by ACA mandates, our industry worked closely with the DHSS throughout the writing of the ACA regs. Key ACA Definitions 1. (Eligible) Full Time Employee: Any employee who averages at least 30 hours per week (130 hours per month; 1560 hours per year). 2. Seasonal Employees: Employees working less than 120 days in a year. Generally excluded from ACA coverage because not considered full time. 3. Healthcare Plan—Minimum Essential Coverage (MEC): References the requirement that a compliant healthcare plan after January 1st must cover healthcare basics, “the diagnosis, cure, mitigation, treatment or prevention of disease.” Many of the so called “mini med”, wellness, and preventative plans will not meet the MEC requirement. 4. Healthcare Plan—Minimum Value: References the requirement that a compliant healthcare plan cover at least 60% of the overall costs associated with 1) physician and mid-level practitioner services, 2) hospital and emergency care, 3) pharmacy costs, and 4) laboratory/ imaging services. Many high deductible plans will not meet Minimum Value requirements.

  • The IRS and DHSS are developing a Minimum Value Calculator and a safe harbor checklist that employers can use to see if their plan meets the Minimum Value test.
6. Affordability: Refers to the ACA requirement that the employee’s share of the costs associated with single-only plan can be no more than 9.5% of the employee’s income. 7. Play: Refers to the decision an employer might make to offer a healthcare plan that provides Minimum Essential Coverage to 95% of its full time employees and their dependent children under age 26 (NOTE: It is not mandated that spouses be offered the plan). Even employers who “play” may be subject to penalties if 1) their plan is not affordable, 2) they fail to offer the mandated coverage to at least 95% of their eligible employees, or 3) if they do not offer coverage that meets the Minimum Value test. 8. Pay: Refers to the decision an employer might make to not offer the Minimum Essential Coverage, making them subject to “failure to offer” penalties. 9. Administrative Period: Refers to the first 90 days of a new hire’s employment within which their employer is required to offer an eligible full time employee the mandated benefits. 10. Exchanges: The mechanism through which insurers will offer small employers (less than 100 employees) and individuals the ability to purchase health insurance. If a state doesn’t provide an exchange, the federal government is required to do so—Washington, Oregon and California have created exchanges. 11. Subsidies: The credits available to individuals who qualify for assistance in order to purchase coverage through an Exchange. The subsidy assists the individual but is provided directly to carriers Key ACA Requirements 1. Employer Requirements: Employers with 50 or more full time employees (and full time equivalents) must offer a healthcare insurance plan that provides minimum essential coverage (MEC) to 95% of their full time employees and their dependent children (the play option) or be subject to penalties (the pay option). 2. Employer Penalties:  Employers are subject to penalties whether they pay or play. The amount of the penalties varies: 3. Penalties for Employers who Play—“Inadequate Plan” Penalties:  If the plan offered is “unaffordable” or does not provide “minimum value” the penalty is $250/month (up to $3K annually) per impacted employee who seeks and is granted a government subsidy. 4. Penalties for Employers who Pay—“Failure to Offer” Penalties:  If the employer does not offer a MEC plan to 95% of their full time employees and their dependent children, the monthly tax is $167 (up to $2k annually) on ALL full time employees (minus their first 30). NOTE: Pay Penalties apply to all employees, not just the employees not covered and are not tax deductible. 5. Individual Requirements: Individuals must enroll in a healthcare plan that provides them and their dependents minimum essential coverage or pay penalties. If they do not obtain insurance through their employer or Medicaid, they are required to purchase an individual plan that will be offered to them through Exchanges. 6. Individual Penalties: The penalty for failing to have insurance is either a flat dollar amount per person or a percentage of household income.
  • 2014: $95 per person (up to 3 or $285) or 1% of household taxable income
  • 2015: $325 per person (up to 3 or $975) or 2% of household taxable income
  • 2016: $695 per person (up to 3 $2085) or 2.5% of household taxable income
  • 2017 and beyond – same as 2016 with Cost of Living increases
7. Individual’s Eligibility for Subsidies:  Individuals with household incomes determined to be 100-400% of federal poverty levels may be eligible for government funded subsidies that they can use to buy insurance through public health exchanges.  NOTE:  Employees are not eligible for coverage if they are on Medicaid or have been offered a healthcare plan that is both affordable and meets Minimum Essential Coverage by their employer and refused it. 8. State and Federal Public Health Insurance Exchanges
  • Provide a place for individuals or small employers to purchase of compliant healthcare insurance. Available plans will be categorized into one of four groupings: Bronze, Silver, Gold and Platinum, plus a catastrophic plan.
  • Determine an employer’s or individual’s eligibility to purchase through the Exchange.
  • Determine the affordability of a plan offered to an individual through their employer.
  • Determine an individual’s eligibility for exemptions or subsidies.
9. New Discrimination Mandates
  • The regulations relating to the new discrimination provisions embedded in the ACA are not yet written and likely won’t be before 2015.
  • 2014 will allow differentiation in the plans offered to different employees and will allow different levels of employer contributions to those plans. Tiered/pay up plans are allowable in 2014.
  • Discriminations in favor of lower paid employees will remain permissible after 2014. Any employer can pay more for their lower paid employees to ensure what they offer meets “affordability” standards.
The ACA and Staffing - Unique Applications  1. Variable Hour Employees: Refers to employees working in a job where the length of employment or the hours of work each week is uncertain. The Variable Hour employee definition is assumed to apply to the majority of temporary or contract workers represented by the staffing industry who work on 1) an undetermined number of “short term” assignments, 2)  with a variety of clients, and 3) likely to be gaps between assignments.
  • Estimates are that only 10% of the current temporary and contract workforce will be benefit eligible.
  • The ASA is advising its members that assignments targeted to last less than six months will not be challenged if classified as “variable.” Assignments intended to last longer than six months are subject to “common sense” interpretations of the requirement of “uncertainty.”
2. Specific Rules for Variable Hour Employees:
  • Measurement Periods and the Look Back Rule: A look back/measurement period is a time period (ranging from 3 to 12 months as selected by the employer) during which a variable hour employee is determined to meet the test of full time status. To become eligible for coverage, an employee must average at least 30 hours per week during the measurement period.
3. Stability Periods. Stability periods must include the same number of months as the elected measurement period but are counted on a go-forward point from date of benefit eligibility. Employees working full time during the look back period will be benefit eligible during the go-forward stability period as long as they stay employed. NOTE: Employee must be covered during their stability period even if their hours of work are reduced to part-time status. 4. Staffing Firm Costs to Play include:
  • The cost of an affordable plan for 95% of eligible employees.
  • Minus the costs that would otherwise be associated with employees who opt out because they have coverage elsewhere
  • Plus the cost of penalties for any employees that receives subsidies because the plan offered is not affordable.
5. Staffing Firm Costs to Pay include:
  • A nondeductible monthly tax assessment of $166.67/month on all eligible employees (over the first 30). Penalties would be applied to ALL employees, covered or not.
6. Impact of Increased Costs on Clients
  • Expect 1-5% increase in bill rate
7. The Staffing Industry Challenge – “There are not a lot of Health Plans Designed for Temporary Workers“
  • Mini med plans no longer allowed. Fixed dollar indemnity plans—do not qualify as providing “minimum value;” preventive and wellness plans—won’t provide “Minimal Essential Coverage.”
  • New plans are expected to be developed between now and January 1st but with unknown costs and coverage.
The American Staffing Association and the ACA The American Staffing Association played an active role in writing ACA regulations. The ASA supports compliance with the law and urges its members not to participate in practices that violate either the substantive components of the law or its intent. The ASA strongly urges its members to avoid any arrangements with clients aimed at avoiding coverage or penalties. Activities the ASA believes will trigger an IRS audit include: 1) splitting hours of work between two entities when the employee is doing one job, 2) reducing employee headcounts below 50 for the purpose of avoiding ACA requirements, and 3) terminating, refusing to reassign, or limiting the hours of work for employees if the purpose is to deny coverage or penalties. Staffing can continue to be used for valid business reasons; fluctuating workloads, staffing special projects, managing turnover, auditioning processes, and legitimate part time work. For more information on the ACA and how it will impact your temporary workforce in 2014, contact us at infodesk@pacestaffing.com.

The Affordable Care Act and Your Flexible Workforce

by Jeanne Knutzen | May 15, 2013

0 ACA Affordable Healthcare, Blog, Human Resource Roles, What's New in Staffing? ACA regulations, Affordable Healthcare – ACA Smart, Health Insurance, Obamacare, PPACA, Seattle Staffing, Seattle Staffing Agencies, Seattle Staffing Agency, Seattle Temporary Staffing, Seattle WA Staffing, staffing, Temporary Staffing And The Affordable Care Act, Temporary Staffing In Seattle

While we have always known that the Patient Protection and Affordable Care Act (aka: PPACA, ACA, AHA, Obamacare) would impact the temporary staffing industry and its customers, the regulatory information that has been surfacing over the last several months is starting to reveal the impact of some of the details embedded in the law. We are finding both good and bad news in the newly published regulations—new requirements that will increase the costs of temporary and contract workers; nuances in those requirements that will make flexible workforce strategies an even more attractive model for driving down operating costs. While the law is still very confusing, the reality is that most of the regulations that will be written, have been written to the point where more and more cost conscious employers are starting to re-think how they get work done—what types of employees to put to work when, where,  and how. The following information is being provided to PACE customers as a way to lay out the facts of the ACA and its regs, prepare you for what lies ahead, and offer some ideas for not only staying compliant, but mitigating some of the cost increases we are all anticipating. Our comments will focus primarily on the impact of the ACA on our client's non-W2 workforce, which includes not only your temporary and contract workers but any workers performing work on your behalf through the services of a third party employer. ACA Overview Under the ACA, all “large” employers are required to do three things to stay in compliance with the law as of January 1st, 2014.

  1. Offer “minimum acceptable” healthcare insurance to 95% of their eligible fulltime employees (leaving a 5% margin of error).
  2. Ensure that the cost of the plan they offer is “affordable” (i.e. will not require any employee to pay more than 9.5% of their annual pay towards the costs of an individual plan), and
  3. Ensure that the plans(s) offered and the employer’s contribution to these plans is not set up to favorably treat highly compensated employees.
Large employers will be required to pay the costs for meeting these three requirements (what is often called the “play” option) or face substantial penalties for non-compliance (what is often called the “pay” option). The definition of a “large” employer applies to any employer with fifty or more fulltime employees. A fulltime employee is someone working 30 hours a week or 1560 hours per year. The Bad News for Staffing Companies and Their Customers Some clients have asked “does PACE have to be compliant with the law?” The answer is a resounding yes. And for PACE, like most staffing providers, our bad news is that the types of healthcare benefit packages typically available to the staffing industry will no longer meet the new federal standards for “minimum essential coverage.” Most staffing companies are making decisions now to either “play” (pay the additional costs associated with compliant coverage), or “pay” (pay the penalties for non-compliance, i.e. $2000/year per uncovered employee). Both options mean that as of January 1st, 2014, the direct costs associated with using third party staffing services will increase. We are anticipating that the costs to become fully compliant with the law will require most staffing companies to ask for a 2-4% increase in client bill rates, just to break even; anywhere from $.16 to $.35 cents per hour. Cost increases for all types of staffing - core and non-core—represent the bad news that is part of the ACA and will impact all "large" employers on or about January 1, 2014. Some Good News for Users of Staffing Services—the Variable Worker and Look Backs! All of the news embedded in the ACA is not bad! While an employer’s requirement to provide coverage applies to all full-time employees (individuals who work 30 hours a week, 1560 hours a year), there are special rules that apply specifically to the types of “variable” workers who work for temporary and contract staffing companies. We believe these rules will create new opportunities for cost savings for PACE customers. As the ACA regulations have rolled out, we now know an employer can stay in compliance with the law and still delay offering the mandated benefit packages to some employees who can be legitimately classified as a "variable" worker. A variable worker is someone working in a job that is subject to change, or with an uncertain duration or end date—a condition that is pretty much a given in most temporary or contract staffing environments. The period of time between when the variable worker starts work and the date when they are evaluated for benefit eligibility is called the “look back period” , and can be 3, 6, or 12 months—each employer gets to decide. Staffing companies who go through the administrative process to confirm their workers are  “variable"  and therefore subject to the “look back” provisions in the law, will be able to generate significant cost savings for their customers. While most of our client’s W2 employees will not qualify for variable worker status, and must, therefore, be offered the mandated benefits within an administrative period that cannot exceed three months, most temporary or contract workers will be considered  "variable" and not eligible for insurance coverage until they have reached the required 1560 hours (9 months or more). This variable worker “look back” provision in the ACA creates considerable opportunity for companies like PACE to offer our clients “variable” workers at significantly less cost than would be required for the client to hire an employee directly. The differentials in the direct costs of these two types of employees will be dramatic—creating compelling reasons to rethink their use of third party employers in the early stages of a new hire. The Impact of New Anti-Discriminatory Regulations on Our Clients Benefit Costs One of the more significant impacts of the ACA, not often discussed, are provisions in the law that tighten up opportunities to treat different types of employees differently.  Consultants to our industry are advising us that the anti-discrimination components of the ACA will obsolete any plan that differentiates coverage or costs in favor of highly compensated employees. For the staffing industry, this means that whatever benefit programs offered to our temporary employees needs to be offered to our regular employees. For our customers this means that whatever healthcare benefit package offered to their highest paid employees must be offered to their lowest paid employees. To be compliant with the “affordability provision” of the ACA, no benefit eligible employee in your workforce can be asked to pay more than 9.5% of their gross pay for the cost of your plan’s individual coverage. For a worker earning 20K in a year, this means they cannot contribute more than $1900 a year or $158.33/month in order for the plan offered by their employer to be compliant. How this compliance benchmark is achieved is what will get tricky for many employers. When the compliance calculations are based on what the employer can legally pay for the lowest paid employees, it limits the amount of employer contribution that can be applied to the highest paid employees. If the amount contributed to all employees is based on the amounts of the employer contribution made available to higher paid employees, overall costs of benefit coverage will skyrocket. This is the dilemma the law intends. Employers will be challenged to create benefit programs that will be equally appealing and affordable for all employees. We are already talking to some employers who will elect to outsource their W2 relationships simply to avoid the risks of discrimination. Employer of Record Services—Minimizing the Impact of the ACA! The following are some ideas for PACE customers who are open to looking at new staffing strategies built around the special provisions in the law designed specifically for staffing providers. You will notice that we have laid out these ideas from the perspective of a third party employer service provider, not just a temporary or contract labor provider. The PACE Staffing Network has recently added a new “employer only” service, what we call an Employer of Record Service, partly in anticipation of the service needs of our clients following the implementation of the ACA in January. Employer of Record Services are particularly attractive to employers with strong internal recruiting capabilities because they offer highly discounted bill rates that carve out all extra costs (for recruiting, screening, etc.) to include only those costs associated with providing W2 employer services. Employer of Record Service packages are customized to the unique needs of each client, but the following represents a few ideas of how these services might be applied to your workplace as a way to shave workforce costs.

1. Employers can use a third party employer solution to avoid compliance requirements. For employers who need to add staff, but also want to remain below the 50 FTE (fulltime equivalent) threshold that exempts them from the ACA regulations, using a third party employer solution to channel employees to another employer can delay the point when they must become compliant with the law.

The Employer of Record Service option is ideal for employers who have located an employee they want to hire, but don’t want to absorb the costs or administrative hassles of employing that worker directly. Employer of Record Services is especially ideal for companies who want to either avoid or delay the compliance requirements of the ACA.

We are encouraging our smaller clients to plan now for what lies ahead. We’ve heard stories of regulatory agencies getting ready to target companies who have been sending large numbers of already existing employees to a third party employer as a way to avoid ACA regulation. We do not recommend this strategy. 

But for employers who haven’t yet reached that 50 FTE benchmark, a third party employer solution applied to your near term hires can successfully delay when your company falls under the ACA.

Word of caution: using a third party employer solution is considered a short term (one-two year) solution. The administrative rules of the ACA dictate that after one year, all workers in your facility, regardless of who employs them, will be counted as part of your FTE.

2. Employers Can Use a Third Party Employer Solution to Mitigate the Costs of Adding Staff.  If you’re an employer who needs to hire but is reeling from the high costs currently associated with each new hire (and targeted to increase after January 2014),  it may be time to seriously consider using a third party employer solution as an extended (6-12 month) onboarding strategy.

While you may have already reviewed and walked away from the more traditional temp-to-hire staffing models, the lower cost, Employer of Record Service model offers all the cost savings advantages of categorizing employees as variable, while providing a very behind-the-scenes model of W2 employment.

Whether you use the full service temp-to-hire service model, or the considerably streamlined Employer of Record Service model, the opportunity to onboard a large number of workers at substantially lowered worker costs compared to the costs of hiring directly is the outcome of either choice.

3. Employers Can Use a Third Party Employer Solution to Avoid Administrative Hassles. The ACA is not just a regulation that adds additional direct costs, but is a regulation rich in administrative detail and reporting requirements.  Administering healthcare benefits where you have to apply definitions of variable workers, calculate look back, measurement and stability periods, and do e “affordability” testing, is going to be a daunting task for whoever takes it on.

And the penalties for not doing the right administration correctly will be significant.

As a staffing company with a large “third party employer” workforce, one of our core competencies is our ability to manage all federal and state staffing regulations, including the ACA. We are getting ready now to be fully compliant with all regulations by January 1st, 2014 and will be ready to help our customers manage through the transition.

jeanneFor a better understanding of how the ACA will impact your company and what you need to know about the options available for you to mitigate the costs associated with the new mandates, contact infodesk@pacestaffing.com to arrange for a personal consultation. Our approach to the ACA is not only to be fully compliant by January 1st, 2014, but to help our customers take full advantage of all aspects of ACA provisions that can drive down staffing costs. This article was prepared by Jeanne Knutzen, Founder and CEO of the PACE Staffing Network using information from a variety of legal, staffing, and other professional sources.

Full Time Employees or Outside Consultants? The Benefits and Drawbacks of Each

by Jeanne Knutzen | April 30, 2013

0 Blog, What's New in Staffing? Full Time Employees Or Outside Consultants, Seattle Staffing, Seattle Staffing Agencies, Seattle Staffing Agency, Seattle WA Staffing, staffing agencies in seattle, Staffing And Hiring Decisions, Temporary Staffing In Seattle, The Benefits Of Outside Consultants

Non-standard working arrangements between employees and the companies that hire them are on the rise. At this point, data suggests that about 30 percent of employer-employee working arrangements in the U.S. fall outside the traditional 1099 model defined by details like eight hour days, onsite task completion, taxes directly withdrawn from paychecks, and employer-provided health insurance. And this number appears to be growing rapidly. As you staff your open positions and search for the most efficient ways to pair workers with vital tasks, how can you decide between traditional employment contracts or consulting agreements with independent providers? Here’s a quick list of pros and cons that can help you move forward. Salary Costs You’ll usually need to pay your outside consultants more per job/hour/project than you would pay a full time employee. But there are several benefits you’ll receive in return for this increase. For example, consultants don’t need to be paid between jobs or kept on board during lulls in your business cycle. They typically show up, provide the skills sets needed, and then move along to the next job when company demand scales back. And they don’t require standard benefits like health insurance and retirement savings plans. In the long run, the amount you save on HR costs, benefits, hiring expenses and the stability that shelters an employee from market highs and lows will equal the extra amount you pay the consultant for his or her services. Skill Sets Consultants can usually offer a higher level of a specific required skill than you may find among your full-time employee pool. So they’re usually called upon to tackle work that’s time critical, skill specific, or too complex for companies to complete themselves. Because they make a living this way, consultants are wise to continually and aggressively build new skill sets, unlike employees who may be less motivated to personally investigate new corners of the industry. But at the same time, employees offer years of experience within their own areas, and they possess intangible institutional knowledge that consultants don’t have. Tax Complications Employers are responsible for deducting all applicable taxes from the paychecks of their traditional employees, which may include federal taxes, unemployment insurance, social security, and state and local taxes. This can add bureaucratic hassle to the full-time staffing process, while outside consultants don’t require this service, since they typically handle tax issues on their own. But again, the more labor and energy the consultant puts into a specific job, the higher the rate he or she can charge an independent employer. And employers will still need to collect W9 forms from consultants and report their earnings to the IRS. This list of pros and cons is by no means comprehensive, but the choice between traditional vs. non-traditional hiring contracts can mean the difference between success and failure for companies with narrow margins. So don’t face these challenges alone. Hiring a full-time or temporary employee can be beneficial to your business. Before you make your decision, reach out to the Seattle staffing and employment experts at PACE. We have the resources and network to help you manage your staff and draw in new talent.