The How and Why of Benefits Plans for Contract Employees – Part 2 – How?

What is the secret to success when sourcing talented temporary personnel? Offer meaningful benefits. Times have changed. Here’s why contingent workforce management professionals need to rethink the provision of benefits to contract workers. Part 1 focused on why the dynamics regarding benefits for contract labor have changed. In Part 2 below, we’ll focus on how to approach the challenge of developing a benefits program for contractors that both attracts top talent and doesn’t strain the budget.

In deciding what benefits to offer contractors, companies should work with their staffing agencies and – for internally sourced workers – their Employer of Record/Payrolling agency to consider types of workers to be engaged, average lengths of assignment, business needs, cost trade-offs, and more. But keep in mind, mishandling of benefits can result in co-employment claims. To avoid litigation, the benefits must be offered by the entity engaging the worker on behalf of the client company. The worker cannot directly participate in the client company’s benefit plans.

When serving as an Employer of Record for clients, nextSource offers standard benefits to “payrolled” employees who meet eligibility requirements. Additional financial benefits are customized for each client, if desired. But to win in today’s competition for talent, we counsel clients on ways to deliver the non-financial benefits listed above.

Assess the work environment. The Employer of Record should regularly conduct satisfaction surveys and feedback sessions, soliciting and acting on suggestions for enhancing the worker experience. Provide leadership training to managers – building their communication and administrative skills – and include an assessment of their managerial effectiveness in each performance review. Emphasize that when dealing with temporary workers, they must manage the work, not the worker.

Workplace flexibility is a “must have” for most workers. For many, that equates to the option to work remotely. Family care responsibilities are a significant factor contributing to the reduction of women in the workforce. In addition, while most companies are impacted by workers leaving for retirement, few have formal programs for retaining or re-engaging workers. Accommodations may include flexible work hours, job sharing, a hybrid work environment, flex days, and/or subsidized access to pre-screened back-up childcare providers.

Make strides to build a diverse and inclusive workforce. Companies viewed as unwilling to “walk the talk” experience less success when achieving diversity goals, losing access to large populations of talented professionals. Work with your temporary resource providers to establish proactive programs that go beyond meeting quotas for diversity spend to actually provide diverse candidates.

Build a “Ready When Needed” candidate pool. While professionals often turn to temporary work to provide a series of challenging assignments that builds skills and professional networks, they are also seeking ways to reduce time between engagements as well as the effort needed to find their next assignment. They are also seeking portable benefits that continue across engagements. Hiring companies must establish and nurture a curated, client-specific talent community that includes past workers, referrals, retired employees, and others with targeted skills. This enhanced candidate experience leads to a stronger employer brand, reduced time to find needed talent, and the ability to re-engage individuals who have provided exceptional service in past engagements.

To learn more about the nuances of designing a benefits program that will provide a competitive edge when sourcing and retaining contract workers, Contact us.