“You take what you can get in order to pay rent, buy food, she explains. If you can find a group that might have potential for hiring on permanently, you take the risk of staying around and putting in a lot of hours, proving yourself to these folks.
She says she has been in several Microsoft groups that wanted to hire her but couldn’t because, she was told, the group lacked head count or had a hiring freeze. So, she says, you continue to be a contractor. Working holidays. Or just simply eating the time. Or even making up time when you get sick.
It is a risk on so many levels when contracting. But to be led to believe that you have a possibility of being hired on permanently and then not, well, it’s almost like a big lottery game with these folks.”
Sumpreme Court refuses to hear appeal of Microsoft “permatemp” settlement, Mike Blain, WashTech News (November 13, 2002)
When Jeff Nugent from CW Solutions directed me to the above referenced landmark case in the context of his firm’s value proposition, I must admit that I had not fully comprehended the risks associated with contigent or contract workforce engagement. Certainly not the degree of risk an “ineffective” process posed and continues to pose to organizations that attempt to balance procedural demands with operational requirements.
And even though current labour legislation in both Canada and the U.S. combined with the introduction of “governors” such as Sarbanes-Oxley represent a systematic and purposeful evolution of increased scrutiny that is designed to eliminate conflict, the disconnect between critical stakeholders remains.
For example, in the Microsoft case (Vizcaino v. Microsoft), in which the plaintiffs and their attorney’s received a $97 million settlement, the declaration by contractors such as Rebecca Hughes (a former Microsoft contract editor) that the verdict “is great news for workers,” was less than enthusiastically received by other contracters. As one Microsoft contract software engineer put it, the Vizcaino case ruined “a good situation for him and thousands of other Microsoft contractors.”
Against this backdrop, one cannot help but wonder if a happy medium can be achieved in which all stakeholders on both sides of the contract employment issue can reach an accord in terms of both legitimate and effective engagement practices. This is a particularily important issue from the standpoint of the modern supply chain given the expanding workforce vacuum and the relative paucity of experienced talent. (Note: see the Web Resources section at the end of this article for my previous posts on the subject of the pending talent crunch.)
Certainly the increasingly common practice of hiring back fully pensioned workers on a contract basis to make up for a poor or non-existent workforce succession plan will raise serious questions.
That notwithstanding, how do employers successfully balance the apparent disconnect between the heightened procedural demands of contracting as a result of increased legislative scrutiny, and the operational requirements of the organization in which “getting the job done” is the prime concern? A task I might add that is made considerably more complex by the different levels of government intervention through various acts at the federal and/or provincial and state levels. (Note: the following link should prove to be a useful starting point in terms of sifting through the employment laws at the Federal and Pronvincial levels; http://canadaonline.about.com/od/labourstandards/Canada_Employment_and_Labour_Standards.htm. For U.S. readers, visit the U.S. Department of Labor’s Employment Standard’s Administration at http://www.dol.gov/esa/.)
Balancing Risk and Needs?
In an upcoming post I will be discussing the risks associated with the actual RFP process and as suggested by the individual that had been interviewed, the “three premiums” that must be paid to ensure a fair and fully compliant engagement process.
That said what is a viable approach that an employer can take when attempting to balance the contradictory interests of different stakeholders on both sides of the employment fence?
In a March 14th, 2003 article by Michael Yanta that appeared in the Houston Business Journal (see web resources for the corresponding link), the issue of co-employment and the litigious elements associated with not fully undertanding its definition, introduced a third party into the equation – the staffing firm.
For those of you who, like the many organizations to which the Houston article referred, are unfamiliar or “unclear” with how a co-employment arrangement is defined, “co-employment is a legal doctrine that applies when two separate businesses exert some control over an employee’s work assignments or conditions of employment. Once again, I would strongly suggest that you become familiar with both the laws that govern your particular region as well as your organization’s interpretation of said legislation as it relates to co-employment. This is especially important if you do not want to end up as a neutralized stakeholder where your departmental needs take a backseat to an overly zealous mandate centered on litigation avoidance over operational imperatives.
Yanta went on to say that “both the Internal Revenue Service and various courts have found that a temporary worker of a supplier working at the customer’s work site – even though paid and treated as an employee of the supplier – may still be considered an employee of both the supplier and the customer for legal purposes.”
This blurring of the lines as Yanta put it, can have “costly” consequences. As a result, getting the proper resources through the most effective delivery mechanism re staffing firm, is a critical part of the entire process. Some might even suggest that it is the most important part of contingent workforce engagement.
Why CW Solutions?
As always, it is at this stage that I would like to emphasize the fact that I am not a voice piece for the sponsor – in this case CW Solutions. In assessing the viability of their value proposition for your organization, it will be up to you to determine how they may be of service. In this regard, I will direct you to the Sponsor Presentations section of the PI Blog to invistigate the CW Solutions perspective in greater detail, and at your own convenience.
Proceeding with this understanding, and based on both my interview with CW Solutions’ founder Jeff Nugent, as well as my research into this interesting aspect of the procurement process, the firm with whom you partner has to possess an intimate and “balanced” knowledge of the proper procedural (re legislative) requirements associated with contingent workforce engagement, while fully understanding the operational requirements of the position(s) being sought, and do so against the backdrop of diverse stakeholder interests involving the client’s (nee de facto employer’s) HR, Finance and Legal departments.
This of course leads to the question, why CW Solutions?
If I have correctly understood Jeff’s overview of his firm’s services, it would appear that CW Solutions removes the inherent risks of contingent workforce engagement, without resorting to the traditional draconian measures associated with a centrally imposed, restrictive process that stifles access to a needed company resource.
CW Solutions’ “practicle compliance” mindset, which is outlined in slide 3 of their presentation, claims to remove the unnecessary barriers to productive “regionalized” engagement, while satisfying head office guidelines. Guidelines that are becoming increasingly important based on precedents such as the Microsoft “permatemp” case.
Web Resources:
Supreme Court refuses to hear appeal of Microsoft “permatemp” settlement: http://www.washtech.org/news/display.php?ID_Content=381
Technology and the Growing Talent Crunch: https://procureinsights.wordpress.com/2007/08/01/technology-and-the-growing-talent-crunch/
Talent Attraction and Retention in a Global Economy (White Paper): https://procureinsights.wordpress.com/2008/01/16/talent-attraction-and-retention-in-a-global-economy-white-paper-release/
Firms hiring temporary workers face co-employment challenges: http://www.bizjournals.com/houston/stories/2003/03/17/focus5.html
Use the following link to learn more about our Sponsorship Program; https://procureinsights.wordpress.com/pi-sponsorship-opportunities/
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Procurement Insights 
Posted on August 14, 2008
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