To create a compelling performance, an orchestra conductor assembles the best talent available, depending on the piece to be performed. For example, the musicians selected to play a Beatles medley would be quite different from those chosen to perform Beethoven's Fifth.
Likewise, an organization needs to put together a staff that flexes to reflect the company's current business plan. And instead of shifting around pianists, violinists and drummers, depending on the task at hand, today's organizations may mix together full- and part-time staff, temporary workers, independent contractors, seasonal workers and student interns as the best strategy for getting the job done.
Multidimensional staffing — with its flexible combinations and potential for cost savings — is more important today than ever before. Many companies have downsized their traditional staff, but special projects or seasonal fluctuations demand more manpower, and a contingent staff may fit the bill.
Workforce planning is a tool to help you determine if, when and how contingent staff members may be the right strategic choice for your organization. You can find the data you need to evaluate your future workforce by interviewing managers of individual work groups inside your organization and then consolidating and analyzing that data.
A key step is to identify the gap between what your company has in the way of organizational talent and what it needs down the road. Within that gap, you may see a legitimate need for adding contingent staff.
During the planning process, identify the critical processes that will be needed for your company to meet its key business goals for the next few years. Then pinpoint what people capabilities are needed to deliver on those critical processes. As you translate workforce planning into staffing strategies, you'll find that certain needs may warrant hiring contingent staff.
For example, let's say you're conducting an extensive customer satisfaction survey. It probably makes sense to hire temporary workers — or an independent contractor — to do the work rather than add staff now, only to fire them later.
Federal and state tax and labor regulations make it critical that you hire contingent staff members carefully. Businesses can't use contingent workers simply to avoid the tax, equal employment opportunity and other legal requirements applicable to regular employees. Do so, and you risk severe penalties. (See "Strike the right note when classifying employees" below.)
But certain situations may warrant hiring contingent staff. Here are some of them:
To avoid layoffs later. Let's say your company has a specific job to accomplish, such as updating your global database. Rather than add a half dozen keyboarders to your core staff, you decide to bring in temporary (or seasonal, if the project is done annually) workers or hire off-site independent contractors to work on the six-month project.
This way, you won't need to fire anyone when the project is over. And your company isn't obligated to provide the extra workers with benefits, including costly health insurance coverage, during the project.
To seek independent judgment or specialized information. If the job requires using independent judgment, a sound choice may be to engage an independent contractor or temporary worker. For instance, a company wanting to cut costs in a down economy may contract with a consultant known for analyzing business operations and making those kinds of recommendations. Similarly, skilled temporary workers or independent contractors may make sense for certain specialized tasks; accountants, lawyers and IT professionals are often hired in this capacity.
Also, some individuals prefer working from their home part-time — or not being tied exclusively to one company. Offering a part-time position or contractual agreement may be the way to attract a particular individual with the right skill set.
Naturally, having employees with the right combination of skills and abilities — and at the right time — is crucial to your organization's success. For example, you may not have a need for a software trainer year-round, but you do while some of your employees are learning to use a particularly complex system.
Your organization and its needs are unique. With proper analysis and planning, you can put together an "orchestra" that will make beautiful music as it meets company goals.
So, you have a multidimensional staff of full- and part-time regular employees, independent contractors, and temps. Although that may suit your business plan to a tee, tread carefully when classifying paid workers.
A misclassification can lead to lawsuits for lost overtime and other benefits. Additionally, you could be liable for federal or state back taxes, penalties or fines. And the classification process can be complex because a number of factors must be considered.
For example, according to the IRS, a worker who generally doesn't take on any financial risk in his or her work for you might be considered a regular employee. But someone who provides his or her own tools, materials and place to work — and has often made a significant investment in them — could be considered an independent contractor.
The Department of Labor has also recently gone on record about increasing its scrutiny of employee classification. One thing is for sure: It's critical for companies to understand the practical and legal differences between employees and independent contractors. Classification is complex and may require the advice of a legal adviser.
Get in touch today and find out how we can help you meet your objectives.