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When adding contract staffing services to your existing direct-hire recruiting business, you must first decide how you are going to handle the back-office tasks. You can handle them yourself, or you can outsource them to a contract staffing back-office service.

Most recruiters opt to outsource because it allows them to focus on contract placement opportunities without taking away from their direct-hire business.
A contract staffing back-office service should assume responsibility for all the administrative, financial, and legal details associated with your contract placements. The back-office should also handle all the weekly tasks and actually become the contractors’ legal employer of record.

Here is a partial list of the critical tasks that should be provided by a contract staffing back-office:

  • Bill rates and pay rates assistance
  • Contract generation and negotiations
  • Employee paperwork generation and tracking
  • Payroll funding and processing
  • State and federal taxes withholdings
  • Workers’ compensation coverage
  • Unemployment insurance protection
  • Invoicing and collections
  • Background checks (drug screenings if applicable)
  • Certificate of Insurance coverage
  • Benefits – medical, dental, vision, 401(k), etc.

Outsourcing the back-office component allows you to easily offer BOTH direct and contract staffing services so that you can become a sole-source provider to your clients. But if you decide to outsource these tasks, be sure to carefully select your provider. You will want to find an experienced contract staffing back-office provider with a well-documented history, an impeccable reputation, and positive referrals and testimonials. Remember that your back-office is a reflection of you, the recruiter.

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