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Four in 10 Firms Use More Independent Contractors

Four in 10 employers have used an increased number of independent contractors over the past two years, a survey indicates.

The online survey of 430 senior human-resource executives was conducted by Right Management, the talent- and career-management expert within ManpowerGroup®.

Asked if their organizations had seen an increase in the use of independent contractors in the past two years, 41% of respondents said yes and 59% said no.

“Nearly all companies are re-examining their talent-management practices in order to align their work force with their business strategy,” says Michael Haid, Right Management’s senior vice president for talent management. “This has required a behavioral shift that includes the greater flexibility afforded by independent contractors.”

Many of the contractors, Haid acknowledges, eventually become full-time employees. “But just as many prefer their independence, and organizations must accommodate the goals of these workers to stay competitive in the marketplace and attract the best and brightest talent available.”

The increased use of independent contractors creates legal-compliance concerns, cautions Neil Alexander, co-chair of the Contingent Workforce Practice Group of Littler Mendelson, a national employment- and labor-law firm: “Many firms haven’t taken precautions to help limit the likelihood that a government auditor or court will determine such workers have been misclassified. Taking the time to design a work force model in advance can reward productivity, lower overall labor costs, and help avoid findings such workers have been misclassified. The penalties, interest, and uncompensated overtime can add up very quickly.”

Survey respondents were also asked if their organization had seen an increase in flexible working practices over the past year. Twenty-three percent said “Yes, a lot,” and 54% said “Yes, somewhat.” Only 22% said no.

Haid advises that such HR policies and practices are on the increase. “These might be more-flexible work hours, telecommuting, or even a greater use of temporary or contingent workers for specific projects or short-term assignments.”

Right Management surveyed 430 individuals on March 15, 2011, in partnership with law firm Littler Mendelson.



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