3 Ways Contractors Provide Value to Companies

In the current employment environment, you likely won't have to tell many client companies what contractors can do for them. They already get it. They want the flexibility and cost savings that contract staffing offers and are actively pursuing contractors.  

But there are still a few employers out there that don't understand why they should use contractors and often question the cost. With these clients, recruiter Mario Fidanzi of MedTeam Staffing says recruiters need to employ an "educational sell." Here are a few talking points that have worked for Fidanzi:

  1. The cost of missed opportunities. Some opportunities won't wait for companies to find and train the right direct hire employees, Fidanzi said. They need people who can come in quickly and hit the ground running. "A contractor can bridge the gap until they find someone to hire permanently," he said. If a contractor can help a client bring in more business, that alone can justify their cost.
  2. Employees cost more than their pay rate. When companies compare the cost of employees to contractors, they have to look beyond an employee's base pay. There are also costs associated with administration, Workers' Compensation, onboarding, training, turnover, and more, Fidanzi said. Contractors don't come with these additional expenses.
  3. Obamacare relief.  One of biggest expenses is benefits. Employers who previously decided not to take on that additional expense may be forced to under the "employer mandate" of the Patient Protection and Affordable Care Act (PPACA).  The employer mandate, which kicks in next year, will require employers with 50 or more employees to provide healthcare insurance to those employees. One way around this for small-to-medium-sized companies is to utilize contractors to keep from reaching the 50-employee threshold.  The contractors become employees of a contract staffing back-office, and the back-office is then responsible for PPACA compliance for those contractors. Fidanzi said this has already driven some of his clients toward contract staffing.

Debbie Fledderjohann is the President of Top Echelon Contracting, Inc.

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