A current trend in the NZ market place is for businesses to advertise for contractors themselves, or find a contractor through their own network. Often it can be a past employee or a ‘friend of a friend ‘ – however informal avenues for ‘recruiting’ in this way can be fraught with risk.
There is a misconception abroad that this direct sourcing of contractors saves costs. The very real risks inherent in such direct sourcing outweigh any perceived benefits.
The business opens itself to claims for direct employee entitlements – namely holiday pay; ACC cover; sick leave costs and statutory holiday costs
Should a contractor be deemed to be an employee (and there have been many such cases outlined in the NBR of late) then the employing party (in this case the employer hoping for a cost effective solution) is also liable for the PAYE payments due to IR.
A less experienced party can also expose themselves to major risk by not insisting on the most effective insurance cover for the consultant they have taken on directly in good faith.
One of the most dangerous effects of the ‘do it yourself’ approach to contracting is the lack of ‘benchmarking’ of talent. The projects that require contractual labour input are often complex in nature and demanding in terms of deliverables. The very best available contracting talent can be chosen from an extensive database of proven, talented and experienced contractors chosen over time by an agency which specialises in offering contractors to the market.
We have observed innumerable difficulties arise when a contractor is taken on directly and the project comes to an end. There is often a lack of clarity around the termination of the relationship and the expectations around it.
Being ‘arm’s length’ at this time makes the process simple, uncomplicated and robust.
A degree of distance in the employment relationship – at any time – between the contractor and the company which is using the contractor’s skills, allows for a very smooth and seamless functioning that protects the client from the stresses and disconnects that can occur with direct interface.
The three parties – contractor, agency and client – involved, are in a symbiotic relationship with the shared objective that the relationship runs smoothly at all stages throughout the duration of the project or caretaker/interim role.
A specialist agency can closely monitor ‘project creep’ (after taking a detailed brief) and can hence report objectively to the client on progress milestones – It has been our experience that when the contractor is taken on directly there is a limited monitoring of the reporting supplied to the client.
A good specialist recruiter of contractors, can then, save you time and money, provide a wider range of choice when it comes to candidates and can take the guess work out of getting the ‘best available candidate’. Such an agency can assess and individuals ‘fitness’ to do a contract role and it may be much easier to have a third party manage the contractual relationship.
In summary – we have found that the engaging of contractors through a specialist agency such as Interim Taskforce enables a tightly monitored, transparent, effective and outcome focussed solution which supports real ROI and helps eliminate your risk.
We would be delighted to discuss this further with you…
