Four Questions to Ask When Selecting Contract Staffing Back-Office

Using a contract staffing back-office is a great way to reap the benefits of placing contractors without the hassle and risk that comes with employing those contractors.  The question is, which contract staffing back-office should you entrust to be Employer of Record for your contractors?

Obviously, you want a back-office that has been in business for a long time and has a good reputation.  But beyond those basics, here are a few other questions you may want to ask:

1. What happens if a client doesn't pay an invoice?
If the back-office provider's standard practice is to ask recruiters to pay any client invoices that are "uncollectible" by the back-office, you may want to consider your ultimate financial obligation. Just imagine if a client who uses several of your contractors suddenly decides to stop paying the back-office's invoices. You could find yourself on the hook for several thousand dollars!  

2. Do you provide contractor benefits?
Getting quality, affordable benefits is the top priority for many workers, especially as healthcare becomes more and more expensive.  So if you want to attract the best contract candidates, make sure your contracting back-office offers benefits to its contractors.

3. What positions do you accept?
Some contract staffing back-offices will only place office professionals who fall under the standard 8810 Workers' Compensation code. Why? Well, since those positions come with the lowest risk of Workers' Comp (WC) claims, the WC rate for them is much lower than for other positions.  But if all of your placements don't fall into that classification, you will have to handle your own back-office tasks for those placements or have a separate back-office provider who can handle your placements that fall outside the 8810 code. When shopping for a contracting back-office, find out before you have a job order what positions they can and cannot place.

4. Do you recruit candidates and fill your own job orders?
Some contracting back-offices also recruit and place candidates in addition to handling the back-office tasks for recruiters. If that's the case, remember that they will be working closely with your candidates as well as your clients. Your safe bet is to stick with a back-office provider that does not do any recruiting and simply serves as the employer and handles the back-office tasks for the candidates you place.  

Selecting a quality contracting back-office is an important decision because of the sensitive tasks they handle.  Be sure to do your due diligence and select your back-office partner carefully.

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

Views: 175

Comment by pam claughton on November 21, 2011 at 6:21pm

I would add another question is about when you get paid. Do you have to wait for the client to get paid before you do? Seems like most services do this. However, we use ECS, Employment Contractor Services, and a key reason is because we don't have to wait, we get paid immediately, when the contractor gets paid, which is wonderful, and weekly! I've used them for several years now and have been very happy.

Comment by pam claughton on November 21, 2011 at 6:24pm

Just thought of another question, about how the percentage rate is calculated. Some services will have you call and get a quote for each contract, or will negoriate with you on the spread or even on the bill rate. What you ideally want is what ECS does, a set percentage on the pay rate, so nothing changes if you get a better spread/negotiate a higher bill rate.

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