Companies are facing unprecedented challenges to achieving more with less given the current business environment.
As a result, companies are using contract workers more than ever before to supplement their existing workforce.
Contingency staffing services give companies the flexibility to adapt to the rapidly changing business environment while significantly reducing the costs of full-time employment. A payrolled contingent employee typically costs 25% – 30% less than a full-time employee.
Payrolling designated workers has become an essential part of an effective contingent workforce strategy.
Whether it’s temporary staff, former independent contractors, returning retirees, or essential workers sourced by your company the need for an experienced contingency staffing provider has never been more apparent. In addition, payrolling brings the same employer-employee relationship between payroll service provider and the designated worker as a regular temporary service.
A payrolling strategy is designed for situations in which organizations are able to choose candidates without hiring or retaining them as regular permanent employees.
Your managers or recruiters pre-identifies the candidate and determines the appropriate compensation, and the payroll service provider takes care of the rest. They take full responsibility for payroll administration and of all government-mandated paperwork, including tax withholding, fringe benefits, unemployment insurance, and workers’ compensation. This practical solution to full-time hiring allows you to balance uneven workloads and optimize internal resources. You save time and money while gaining flexibility and peace of mind without the liability of hiring directly onto your payroll.
3 Benefits of Payrolling Contingent Workers
1. Avoid Employer Liability and Risk
Companies that choose to have a direct employment relationship with their contract workers constantly run the risk of having their contractors misclassified through an IRS audit. The consequences of this type of employment relationship can lead to extraordinary costs on back taxes and penalties imposed on the company. By payrolling these designated workers, they become employees of the firm providing the payroll service, and no longer have a direct relationship with the company. This protects the company from misclassification of contract employees.
2. Flexible Staffing and Administration
The payroll service provider maintains a flexible relationship with its clients as their needs change. Clients can increase or decrease the number of contractors to meet their business requirements. In addition, clients may elect to hire a payrolled employee on a full-time basis. The payrolling business model is designed to maximize the flexibility of employment options to the benefit of clients.
3. Workforce / Supplier Diversity Initiatives
Today, many clients are utilizing payrolling solutions to address their organization’s supplier and workforce diversity initiatives.
By engaging an MBE as their payrolling service provider, the spend related to all of the workers onboarded through the MBE payrolling service provider can be counted as Tier I diversity spend. MBE suppliers place a higher percentage of diverse workers on contingent assignments.
In those cases in which a diverse payrolled employee is converted to perm, doing so helps the organization’s workforce diversity objectives.
How Can The Panther Group Help?
The Panther Group’s payrolling solution will save you a considerable amount of money by managing all the onboarding administrative activities related to pre-identified candidates. In addition, doing so will mitigate the risks associated with having contingent workers on your payroll.
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