Understanding contractor classification types in Canada
The digital transformation is not only changing the way companies do business, it’s also changing the way they use talent to get it done.
Contingent Workforce
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Reduce leakage from your contingent worker program to statement of work and establish cost savings and compliance control in the process.
Statement of Work (SOW) Compliance
Talent and supply chain strategies are changing. Global economic pressure, combined with demographic shifts enabled by ever-emerging and changing technologies, has shifted where non-employees are acquired and how they're integrated into your organization. Traditional SOW/Services supply chain approaches are no longer competitive.
Typically, over 30% of the non-employee workforce is engaged through a Statement of Work as opposed to a contingent worker engagement, and as such, is not visible to most of the organization.
What are they working on? How much are they costing you? Are they compliant?
You've spent a great deal of time and effort getting your contingent worker program organized, yet an unfortunate result of your hard work that you're now facing is contingent program leakage to Statement of Work.
This leakage is taking the form of Statements of Work without deliverables, without risk management and at a significant cost premium to what you would otherwise pay had you sourced the services through your contingent program.
“The implementation of a full contingent workforce program including SOW is a challenge for any company. Working with [Procom] ensured we had the expertise to manage complex change in our organization through to a successful launch of our program.”
- P.H. -Client from National Telecommunications Provider
SOW Compliance Expert
Contact Matt
Whether your program is ready to take on rogue Statement of Work or you're just looking to talk to an expert, we're here to help.
Connect with one of our contingent workforce experts with any questions you have. We are always happy to share our insights -- and the best part is that there is no obligation on your part.
The digital transformation is not only changing the way companies do business, it’s also changing the way they use talent to get it done.
Contingent Workforce
When onboarding an independent contractor, organizations must classify aspects of the contingent worker relationship to ensure compliance with the correct tax and employment laws. Misclassification of workers happens when tax authorities and/or regulatory bodies deem one or more of an organization’s contract workers as actual employees.
Managing a blended or contingent workforce is a logistical challenge in the ever-growing gig economy, and contractor classification is one of the biggest risks facing organizations that operate one.
Between 10–20 per cent of employers misclassify at least one worker, and the Internal Revenue Service (IRS) estimates organizations have misclassified millions of workers in the U.S. alone.
When onboarding contingent workers, these insights will help categorize and classify your worker relationships, so you can focus on moving your business forward.
Contingent Workforce
They go by many different titles: contingent workers, gig employees, freelancers, contractors, but regardless of naming, they all serve the same purpose: providing organizations with flexible, skilled staffing solutions to help them quickly respond to market changes and demands.
In the past it was very common for organizations to source their contingent labor through a staffing or recruiting company. For a flat fee or a percentage of each workers’ pay, the recruiter would vet resumes, qualify workers, negotiate pay rates, and manage all payroll and compliance for that worker. In return, the client received timely access to skilled consultants and workers and was glad to outsource the process to their trusted suppliers.
In an effort to save money, better manage talent, and regain control over their recruits, companies have become increasingly more comfortable taking on some or all of the contingent worker engagement process for simple or frequent openings within their organizations. The practice of engaging contingent workers directly is known as direct sourcing and while it is true that direct sourcing can save companies money, the opposite can also be true if the company doesn’t have the proper resources in place or a formal program to manage the process. This post will address some of the challenges with direct sourcing, as well as five key decisions companies need to make when establishing their own direct sourcing program.
It’s important to note, direct sourcing programs don’t have to be an all-or-nothing approach. In fact, many companies use direct sourcing for routine or frequently engaged contingent worker requirements and still use an outside staffing agency to manage complex roles, executive positions and other senior company positions.
Whichever route you choose, below are some considerations to help enhance your program:
Contingent Workforce
Direct Sourcing can provide you access to the talent you need at a reduced cost when compared to other channels.
Direct Sourcing can provide you access to the talent you need at a reduced cost when compared to other channels.
Do you have right resources and systems to manage your workers effectively while complying with.
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