
It's no secret thatrecruiters can receivehuge benefits from offering contract staffing services. Recruiters who add contracting options to their existingdirect-hire business can do the following:
- Earn more money and enjoy steady income with fewer peaks and valleys.
- Become a sole-source provider and no longer have to turn away contract requests.
- Establish trust and build stronger relationships with clients.
- Provide flexible solutions to clients' common staffing problems.
- Add value and increase the payout of selling their recruiting firm or retiring.
However, if not handled correctly, contract staffing can be a thorn in your side instead of an added benefit. If you take on the W-2employer of record, or "back-office," responsibilitiesin-house, you could find yourself overloaded with administrative, financial, and legal complicationsthat you weren't prepared for.Best-case scenario:You step up to the plate and handle them well, but still find yourtimebogged down with non-recruiting tasks that don'tgenerate additional income.And worst case? You get overwhelmed and simply can'tmeet all of the requirements, and you find yourself hit with government audits, fines, back taxes and wages, and other livelihood-threatening penalties. This is particularly worrisomefor smaller recruiting firms and "one-man shows," as your bottom line may not be able to absorb the hit.So what is the solution?
Outsourcing Employer of Record Duties
If you want to add contract staffing to your business model with a minimum of time, effort, and liability, your best option is outsourcing the W-2 employer of recordduties to a contract staffing back-office service. Here are the top three reasons why outsourcing employer of record duties solves your dilemma:
- Lose the financial risk. If you take on the employer of record duties for contract employees, you must have the cash to pay them. This means either having enough money on hand, or taking out a line of credit to float payroll until your end client pays. How long does that take? Well, it depends on the client. It could be 30, 60, or 90 days... or you may never get paid. By outsourcing, you free yourself of these financial shackles. The W-2 employer of record service should carry the liability.
- Drop the legal liability. A W-2 employer of record has numerous legal responsibilities, and they are increasing all the time. For starters, they must:
- Comply with federal, state, and local employment laws: Fair Labor Standards Act (FLSA), Immigration (I-9 and E-Verify), Equal Employment Opportunity Commission (EEOC), IRS, COBRA, paid sick leave, etc.
- Pay the appropriate taxes and insurances (including Workers' Compensation and unemployment insurance).
- Carry a certificate of insurance (most clients require general liability limits between $6-10 million).
- Offer contract employees ACA-compliant health insurance.
- Process payroll in a timely, consistent manner.
- Shed the administrative burden. A good W-2 employer of record service will handle all of the back-office tasks involved with having employees. This includes dealing with human resources concerns (background checks are the tip of the iceberg!), administering benefits, tracking timecards and processing payroll, and invoicing and collecting on receivables.
Done right, outsourcing simplifies everything. If you choose a reputable W-2 employer of record service, you, your client, and your candidate should all have a smooth, pleasant experience. Your candidate will have professionals to go to for pressing human resources or benefits questions. Your client will get the additional workers they need. And you will enjoy the financial benefits of reliable income and the peace of mind that comes from knowing your contract placements are being handledcorrectly.
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FAQs
Find answers to common questions about our services and the contingent workforce management.
FoxHire is an Employer of Record service that simplifies hiring for contingent workforce managers. We handle payroll, compliance, and onboarding, allowing you to focus on your core business. Our tech-forward platform automates administrative tasks, making workforce management efficient.
Our platform streamlines the hiring process by managing all administrative tasks related to contingent workers. You can easily onboard new hires and ensure compliance with regulations. This allows staffing agencies and HR departments to scale talent effectively.
Healthcare, education, and professional services sectors can greatly benefit from our services. We cater to organizations looking to manage a flexible workforce efficiently. Our solutions are designed to reduce administrative burdens and compliance risks.
Yes, we offer a demo of our platform to showcase its features and benefits. This allows potential users to see how FoxHire can streamline their hiring processes. Schedule your demo today to explore our solutions.
Signing up is easy! Simply visit our website and click on the 'Sign Up' button. Follow the prompts to create your account and start managing your contingent workforce.
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