Case Study: Driving Independent Contractor Compliance

Ashley Keaveney
Case Study: Driving Independent Contractor Compliance

Background conceptual image of digital 3d icons-2Many organizations have been hiring an increasing number of  Independent Contractors (ICs) to join their workforce in recent years. There are many benefits of being an IC and many benefits of having ICs work for your company, so the mutual benefits make this type of work relationship appealing to many. Today, ICs account for approximately 10% of the United States workforce.

With so many ICs available across the country, most companies know that they would be missing out on great talent if they didn't utilize this talent pool. One of DZConneX's (DZX's) clients operating in the software industry had many ICs working for them, but they lacked any visibility into this part of their workforce. Our client knew they needed help from a total talent expert to keep track of and gain control over their IC workforce, so DZX's team of experts jumped in to provide  them with a solution. 

 

DZX 3 Keys Nonemployee Workforce Planning

 

The Dilemma

When an organization relies on the services of ICs, there are compliance guidelines they must follow that the IRS meticulously examines within each organization. Meeting these guidelines is critical to a company's success, and sometimes the best way to ensure compliance is through the help of a total talent expert.

Our client, an international leader in the software industry, had little to no visibility into their IC labor which was hindering the success of their organization. They needed to gain visibility into the personnel involved, worker classification processes, duration of involvement, project details and timeline, possible extensions, and contingency plans. DZX's talent experts made a plan to improve our client's workforce visibility and meet compliance guidelines so they could worry less about this and focus more on running their business. 

 

The Strategy

Our solution for this client was centered around the implementation of an innovative technology platform that would provide visibility into all IC activities. We started by conducting considerable research into their existing employee database to check if their workers were being properly classified, and we came across many misclassification issues.

To combat this problem, we introduced a proprietary classification system that utilized advanced technology to properly identify and process every individual entering our client's workforce. Our newly-implemented program included a 64-question checklist to grasp an understanding of what candidates were looking for in a potential new position. We were confident that this tracking system would provide the workforce visibility that they desperately needed. 

 

The Impact

With our new technology in place, our client could feel comfortable knowing that they were meeting all IC compliance standards. The implementation process lasted 4 months, as DZX worked alongside hiring managers to organize data, centralize IC contracts, and install new auditing processes and Vendor Management System (VMS) software. They finally had clear visibility into their workforce which allowed them to keep track of everything that was happening within their organization and identify cost saving opportunities. The new simplified procurement process enabled the finding, tracking and budgeting of ICs to be achieved at any time for anywhere. 

 

To learn more about our successful partnership with this software leader, read the full case study

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