HR City

HR's Confusion about Independent Workers

By SiliconIndia   |   Tuesday, February 7, 2012
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Bangalore: HR organizations are very focused on the full-time employee segment of their business because that's what they do, and they typically don't deal with non-employees. Non-employees are paid through accounts payable or through procurement, so they are tend to be not a part of the system. Due to this reason the differences between HR and independent contractors seems confusing.

Now many forward-thinking companies have decided to partner HR and procurement to figure out in what way they can handle independent workers, because there is a culture issue being involved when a hired independent contractor starts to talk with the one of the full-time employees working alongside. Due to this, the smarter companies have assembled teams which have representation from HR, from procurement and from legal, and they puts together a strategy to get the work done from independent workers.
Form last few years companies are really starting to grasp the benefits of hiring independent workers, they are also learning how to maximize their value while minimizing the compliance risks of nimble hiring. The companies consider that a strategic advantage will be able to nimble in terms of their cost structure. So there has been a dramatic increase in education on the corporate side that has taken about ten years to happen, but its prominent today.

Economic realities are pushing companies to be ruthless about cutting costs and maintaining flexibility but the vigorous compliance driven by tax officials partly explains why companies are getting savvier about managing their independent workers. There's a huge enforcement effort to reclassify people as employees that companies are paying as contractors. There are 14 new bills pending that will increase penalties for companies that try to engage independent workers who would otherwise be classified as employees, and the test for being an employee versus an independent contractor is extremely gray
Motivated by both the carrot of a more agile workforce and the stick of stiff government fines, it seems even the slowest moving organizational behemoths are learning to manage the exploding number of independent workers.

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