Are independent workers headed for a majority?
By 2020, a majority of workers in the United States will be independent, according to a prediction by MBO Partners and its 2012 Independent Work Preview. Earlier this year, the inaugural MBO Partners Independent Workforce Index showed that there are 16 million career independent workers in the country today. By the year 2020, MBO Partners predicts that 70 million people, more than 50 percent of the private workforce, will be independent. This shift toward a new workforce will accelerate in 2012 as both individuals and organizations embrace new models of work, the company asserts. Flexibility and autonomy are two key drivers of this trend, with 74 percent of independents indicating that flexibility is more important than making the most money and 60 percent indicating they always wanted to be their own boss. In addition, the report said that the future independent workforce will largely be made up of experts and
After hiatus, companies are back in the 401(k) game
The 401(k) is officially back. The vast majority of U.S. employers that suspended their 401(k) plan matching contributions during the recent economic downturn have since restored them, according to new analysis by Towers Watson (NYSE; NASDAQ: TW), a global professional services company. According to the analysis, 75 percent of 260 employers that suspended their 401(k) matching contributions have now restored them. Among those employers, about three in four (74 percent) reinstated the matching contributions to their previous level, while 23 percent of employers restored them at a lower rate. Just 3 percent increased their matching contributions to a higher rate. The most frequent employer match formula before and after the suspension matched 50 percent of employees’ salary deferrals, up to 6 percent of pay. The median duration for match suspensions was 12 months. “Many employers are making it a priority to contribute to their workers’ retirement accounts,” said Robyn Credico,
Feds raise unemployment taxes in 20 states, burden for employers on the rise
The rise in federal unemployment taxes (FUTA) has begun. Employers in 20 states and the Virgin Islands are facing a reduction in their FUTA credit for 2011, and as a result, they will pay higher rates beginning Jan. 1. Only three states were hit by similar reductions in 2010. In the affected states, the state governments have unpaid balances for two or more years on federal funds they borrowed to pay state unemployment claims. As a result, employers in those states are losing part of a credit on federal unemployment taxes. FUTA is calculated as 6.2 percent on the first $7,000 of an employee’s wages in the first half of 2011. The rate was lowered to 6.0 percent for the second half of the year. Employers who pay their state unemployment taxes on time typically receive a credit of 5.4 percent to offset their federal unemployment tax. In 2011, this
Contingent labor analytics: Metrics that matter
Once you select a VMS system, you begin the real work of defining and implementing your approach to contingent workforce program measurement. With the right tool in place to support you as your business and the market changes, you should have a solid foundation to define and drive your business intelligence strategy. One key factor to consider when setting targets for your key performance indicators (KPIs) and service level agreements (SLAs) is making sure you design the measurement to give you the data you need at the right level of detail. One example of a metric that often gets over simplified in how it’s measured is “Time to Fill.” We often joke that if you ask 5 people how this KPI should be measured you will get 6 answers. In some ways this is as it should be because it is so dependent on business process. In most cases defining “time
California law puts spotlight on classification of independent contractors
Is that worker really an independent contractor, as defined by law? This question is taking on new importance for employers in the state of California. Last month, Gov. Jerry Brown signed into law Senate Bill 459, labeled by its opponents as “The Job Killer Act.” The new regulation imposes significant civil penalties on employers who willfully misclassify individuals as independent contractors. Penalties were established at between $5,000 and $15,000 per violation, in addition to any other penalties that may apply. On top of that, if an employer is found to have engaged in a pattern or practice of willfully misclassifying employees, penalties rise to between $10,000 and $25,000 per violation. And there’s still more. Any employer who is found guilty of violating the law is required to prominently display a notice on its web site for a full year. Other provisions include: Penalties for charging fees or taking improper check
Creating a business case for VMS and MSP: 10 key questions
I recently consulted with several clients that needed assistance creating a contingent labor management business case to present to their internal executives and stakeholders. These clients were exploring a Vendor Management System (VMS) solution with the possible addition of a Managed Services Program (MSP) to track, manage and report on contingent labor utilization and spend. In my experience, one of the most important and challenging aspects of preparing a good business case is articulating the problem statement. Here are 10 key questions to use as a starting point to identify the challenges and opportunities as input to your contingent labor management business case: How much does our organization spend on contingent labor (temporary resources and SOW contractors)? Who is purchasing the services, where are they in the organization and what was the business need? What is our process for managing the contingent labor lifecycle (requisition to check)? Who is responsible
Use of VMS, contingent workers on the rise
With the number of contingent workers on the rise, more companies than ever are depending upon technology to manage their temporary labor force, according to a survey by Staffing Industry Analysts (SIA). For its fifth annual VMS and MSP Competitive Landscape report, SIA surveyed 42 of the world’s largest VMS/MSP companies. It found that service providers continue to become more sophisticated at managing temporary labor, as well as other forms of services. This is absolutely critical in today’s economy. Consider these statistics: At the end of October, approximately one in every 50 employed Americans had a contingent or temporary job. According to the U.S. Bureau of Labor Statistics, the temporary help services industry has added more than 550,000 jobs since June 2009. That’s a full 54 percent of all jobs created during that time period. Spend under management, meaning the amount of spending on contingent labor that is being managed
Steps to saving on project-based services procurement
As a marketer, I am accustomed to identifying marketing agencies and vendors that can meet my needs for outsourced and specialized projects and campaign execution. I am used to structuring the expectations for deliverables and negotiating pricing. I have relationships with providers I trust to meet my needs. I involve procurement to document what has already been agreed via email and Statement of Work (SOW) drafts or help to facilitate an RFP. I count on them to ensure we have the appropriate legal documentation in place to protect the company. If Procurement told me they wanted to get involved in identifying marketing agencies and structuring pricing, I would be skeptical about the value they could add to that part of the process. But… recent economic conditions have forced me to be more cost-conscious than ever. And I am always stretching to find creative ways to do more with less. So
Making VMS fully integrate with ERP technology
Does your choice of vendor management solution (VMS) really matter? Or are they all essentially the same thing, with fees the main point of differentiation when you shop around? If your business relies Oracle as its enterprise resource planning (ERP) solution to manage accounting, human resources and other aspects of your operations, then VMS solutions are not all alike. Only one solution seamlessly integrates with Oracle: Provade. Recently, Pinnacle Technical Resources acquired Provade. Why? We believe in this industry-leading technology, which brings together ERP and VMS for the ultimate in cost savings and efficiency. Provade, Inc., is a Silicon Valley-based VMS technology company. The Pinnacle-Provade union offers an unprecedented combination that does not exist in the VMS marketplace today. Provade delivers an enterprise VMS, serving corporations and organizations in more than 40 countries in numerous languages and currencies, with billions of dollars in spend under management. Together, Pinnacle and Provade
Contingent labor analytics: Turn insights into actions
It is important to define and measure metrics that give your organization true, actionable intelligence and insights into your non-employee workforce. A VMS with strong analytics functionality will deliver the data, reports, scorecards and dashboards that provide the foundation for business intelligence, the next step is to turn those insights into action. The typical venue in which business intelligence data is reviewed, analyzed and discussed is in a quarterly business review (QBR). One trend we are seeing, is a shift from QBR’s being focused on reviewing where the program has been, to where it needs to go. One key component of a forward-looking strategy is to ensure you adjust the metrics and key performance indicators (KPIs) that you measure, and how you measure them. This enables you to track if/how you are meeting your objectives as they change. Defining and measuring KPIs is a process and not a single event. As your business objectives