Throughout my 17+ years of implementing staffing and HR solutions, I have seen a lot. Often when my team has come in to implement a Managed Staffing Provider (MSP) program, they shock the client by exposing gaping holes in their process and systems. It's not a conversation the client is ever prepared for, but its' one that is vital to implement for managing the growing non-employee population.
I’m here to say having discrepancies in your contingent workforce (CW) program is not uncommon. Why? Because managing a contingent workforce is complicated. And, not having the right expertise to know the proper way to manage that program is, well, messy. I'm here to prepare you by exposing some of those holes and misconceptions.
The First Step is Admitting You Have a Problem
As your contingent workforce grows and expands, CW managers feel the pressure mount. Typically, the decision to hire an experienced Managed Staffing Provider to take over the CW program is not because your team hasn’t tried, but it’s because they are in over their heads.
Whenever we are getting ready to launch a MSP program, we start by pairing an experienced implementation team with the key players within the organization to evaluate your current process of procuring contingent workers, reporting, tracking and systems. Our job is to design a streamlined process and gather data that will be used to outsource your MSP.
The Second Step is Recognizing There's More to the Problem Than You Think
Even after you’ve identified what you thought was the problem, once you bring on a Managed Staffing Provider, the skeletons in the closet start to come out.
“That’s not compliant? But, we have always done it that way!”
“You need what data? Jane in HR doesn’t even track that.”
It’s the job of the MSP to continually identify any current or future issues that you will encounter. Often not operating on all cylinders, an internally managed contingent workforce program is sluggish and in desperate need of a tune-up.
Here are some of the top misconceptions clients often face during the implementation process. Use these as discussion points to identify how much of a handle you have on your CW program before you begin to establish a relationship with an MSP Program.
Widespread Workforce Misclassification
If the contingent workers are on the company’s payroll, many times they are not classified correctly. The HR department would then have to go through all of these positions and develop job descriptions and review them. Then, based on the FLSA standards, go through and reclassify the jobs so they are compliant. Don’t let us be the one to tell you that this is an issue!
Misclassification of Employees as Independent Contractors
There are IRS guidelines and definitions for independent contractors. Are you following them? Did you know that if there was an audit, YOU would be on the hook for all of the taxes? Make sure your HR department is WELL educated on the IRS guidelines for your Independent Contractors.
In order to set a program off on the right foot, there is a lot of preparation that you as the client need to do in order to make sure the transition is smooth and 100% successful. Data collection, process review, reporting, and analyzation, it takes a lot of effort on both the MSP side and on your internal team. It’s an important first step, and once we work through it together, our operations team can hit the ground running.
Ouch! That hurt to hear, I know. There is a lot of complexity and work that goes into implementing an MSP program. As you can see from some of the examples mentioned above, sometimes the issues that you see in your program are just the tip of the iceberg.
You have to be prepared for that, and give your program enough time to launch. Working collaboratively to set attainable goals is important. Keep your expectations realistic, and listen to experts that are spearheading the efforts.
There’s a way to set up a Managed Service Program for your company, and then there is a way to do it right. Sometimes unexpected things may pop up while we are getting the program on its feet, but with years of experience setting up these processes and timelines, know that the implementation team only has your success in mind.