TIP OF THE MONTH: TRY AS YOU MIGHT, YOU CAN'T IGNORE COST

In most any service business, the one that charges the most will almost always try to justify their existence by pushing value. In our business this usually includes such things as saying they supply better temps or that they guarantee no turnover or that their temps have benefits. It's most always fluff. The truth is, we all draw from the same labor pool, temps almost never qualify for the benefits and they are not always the most reliable bunch by nature.

This being said, the bottom line is that the staffing industry is built around saving you money. We do this by accepting many of the insurance risks for you, by providing "on-time" contingent labor built around your work schedule, and by reducing your hiring costs. One report has shown that 80% of all temp users do so because of variable or unpredictable workloads.

Consider this, a recent Staffing Industry Analysts survey indicated that a third of contingent labor buyers said that their expenses would increase 25% if they did not use temps. The same survey cites buyers claims of cutting labor costs by 10 percent, 20 percent or more by using contingent labor. Imagine the impact on your business if your hourly labor cost went from $20/hour to $25/hour overnight?

According to Alexi Zelenev in research done for the Federal Reserve Bank of Chicago, it's about flexibility. Flexible temporary labor smoothes out unpredictable demand. "The presence of temporary help services in a region reduces job search costs and informational asymmetries by helping to match the workers who are looking for a temporary work opportunity with the firms that need the temporary help" according to Zelenev. Survey participants said that "unpredictable workload levels" encouraged them to use contingent labor which produced a 44% savings over those that said flexibility was not a factor. Rapid growth and difficulty finding qualified applicants were the two most common factors after flexibility cited by buyers for using contingent labor at 68% and 51% respectively.

A Staffing Industry Analyst survey taken in 2004 found that the attitude of buyers toward using contingent labor was that 31% of the organizations participating discouraged its use and only 10% encouraged its use. The same question asked in 2010 produced almost the exact opposite with 30% encouraging the use of contingent labor and 18% discouraging its use.

The bottom line to be learned out of all this is that the staffing industry was created to lower your cost of labor....and it does. How you maximize its potential will determine how much of a savings your organization will receive.

Tim's Talking About Criminal Records in Background Checks, the Australian Sex Injury and IRS vs. Independent Contractors

CHANGES IN BACKGROUND CHECKING POLICIES INEVITABLE

Awhile back, we told you about an upcoming EEOC hearing on the use of conviction records in the hiring process. About 250-300 people attended including many interested third party organizations. While statistical data was missing for the most part, the tone of the meeting has been reported to support the position that criminal checks have become a barrier to employment.

It seems certain that existing EEOC guidelines on the subject are sure to be revisited with an emphasis put on responsible use of criminal checking. This means employers giving more attention to the nature of the job, seriousness of the crime and length of time since it occurred in using criminal checks in hiring decisions.

For those that want first hand information, a webcast of the meeting can be found by clicking here. Along similar lines the city of San Francisco is seeking legislation that would prohibit employers from asking criminal history related questions as part of the hiring process. They cite an unemployment rate of 25-30% for ex-cons as the rationale." Ban The Box" laws are on the rise throughout the country.

BE CAREFUL WHO YOU WORK WITH ON STAFFING!

A jury recently convicted the owners of Commonwealth Temporary Services Inc. of Westport Massachusetts of paying more than $25 million in wages under the table to temps between 2000 and 2004.

It would appear that the IRS frowns on this practice as well as the folks at Workers Compensation, Social Security and Medicare. They face up to 20 years each in the slammer and a $250,000 fine on the mail fraud charges alone.

In a related case another Massachusetts staffing firm owner was recently indicted on workers compensation fraud for underreporting the size and scope of his business to avoid paying $110,000 in premiums. This involved not reporting wages as well as misclassifying wages in to lower premium positions.

The possibility that the Feds could go after the users of these temp services for back tax payments and workers compensation premiums is a distinct possibility....so beware!

PROTECTED CONCERTED ACTIVITY AMONG TEMPS UPHELD

The First Circuit has upheld a ruling that the NLRA prohibits a staffing firm from preventing temporary employees from discussing their compensation with others. Enough said here.

THIS WOULD BE AN INTERESTING HEARING TO ATTEND

An Australian woman who was injured while having sex on a business trip is suing for workers compensation benefits. It seems she suffered multiple head injuries and psychiatric issues when a wall-mounted lamp over the bed fell on her during the deed

The victims argument is that she was required to travel as part of the job and stay overnight in the hotel room so she should be entitled to benefits....a "during the course of employment" argument. The woman's lawyer equates the injury to falling in the shower at the motel.

We could have more fun with this but we'll leave it go for now.

IRS CRACKING DOWN OF INDEPENDENT CONTRACTOR ABUSE

The federal government is predicting it will reap $7 billion in revenue over the next ten years by cracking down on employee misclassification of "independent contractors".

If you need more information on compliance issues on this subject we suggest that you Google "Darden Factors" and "Economic Realities-Independent Contractors" to read up on the subject.