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While deploying a flexible workforce can give your company a competitive edge, the truth is that MSPs and their clients can open themselves up to liability, co-employment, and contractual hazards unless they proactively implement policies and procedures to manage the risks associated with hiring contingent workers.

Fortunately, there are numerous methods that can help to mitigate these risks and MSPs aren’t alone in this responsibility. Staffing suppliers should play a role as well and involving them in the process can help with risk identification and the implementation of uniform policies and internal compliance measures that protect clients from serious economic threats.

Consider the following strategies to mitigate the risk of hiring contingent workers.

Select Capable Suppliers

Managing complex risk requires highly skilled staff that can implement well-defined processes. That’s why selecting capable staffing suppliers is the first step toward ensuring compliance with contractual and labor employment laws applicable to assigned workers.

Failing to stay up-to-date and follow new employment regulations can lead to disgruntled employees, legal disputes, and penalties for staffing firms as well as clients.  For instance, misclassifying an employee as exempt or non-exempt can impact their eligibility for overtime pay. But status determinations are based on local laws, the nature of the employee’s work and compensation level. Getting those decisions right requires an environment and support system that equips recruiters to consider numerous factors and deliver.

Standardize Contracts and Policies

A lack of consistent language across the entire supply chain can turn into a major administrative headache for even the most experienced program managers. Plus, having different Ts&Cs can create hazardous loopholes. 

Program administrators and managers don’t have time to consider whether sourcing a contractor from one staffing firm is riskier than another when selecting talent for a critical requisition. The best way to limit risk is by avoiding contractual exceptions whenever possible.

Educate Hiring Managers

What’s the best way to ensure that hiring managers are following company policies and the law? Education. Training hiring managers on co-employment will help limit risk from day one. By working together, MSPs and their staffing partners can develop and deliver training programs that will save clients money by minimizing their exposure to risk and preventing unnecessary claims.

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