temp worker contract management

Rise of Temp Work Increases Importance of Contract Management Software

Increasingly, companies across the world are turning to temp workers (also known as contract workers) to fill employment gaps. These gaps occur for many reasons ranging from maternity leaves to sabbaticals to special projects requiring the services of an expert. It does not matter what is the reason how for an employment gap, what is truly important is how to fill that gap. Companies are discovering that hiring contractors offers several advantages over hiring full-time workers. The U.S. Bureau of Labor Statistics reports that during the 1990–2008 period, employment in the temporary help services industry grew from 1.1 million to 2.3 million and came to include a larger share of workers than before in higher skill occupations.

However, as this trend continues to rise, companies need to develop a better understanding of the hiring process of contract workers and how an enterprise contract management system could help them better handle the HR process.

Flexibility of Contract Terms

The terms to to be included in this type of contract  are quite flexible. Both the company hiring the temp and the person are free to negotiate the specifics. While the employer is free to set the terms of the contract, including hours and contract length, some state and federal laws become applicable once the contract worker fills out the W2 paperwork. Even though the IRS has some guidelines for 1099 contractors in order to avoid the reclassification of a contractor as an employee, these guidelines are much more relaxed than those governing full-time employees.

Speed of Hiring Process

Unlike the hiring process for full-time employees, hiring a temp requires you to be ready for a quick turnover. Just, how quick?

In a Fast Company article, Denis Du Bois, founder of Freelance Seattle, a non-profit organization that offers professional freelance workers a chance to vie for client projects, points out that with regular employees they take a week or two to have a shortlist of people to consider. “But when I hire a contractor for almost any skill, I can find someone in a day,” he says. “And depending on their availability, the person could be starting in two or three days.”

Potential for Cash Flow Crunch

While you may be used to handle vendors on a regular basis and they may be used to you paying just a little bit later than usual, you might find often that temp agencies supplying temp workers may require payment on invoices on tighter deadlines. Even worse, the temp agencies may order the contract workers to stop working if you fail to submit payment on a timely basis.

Importance of Contract Management Software

Through the use of contract management software you can drastically reduce the effort and time it takes to manage your temp work contracts, and simplify its administration. First, the dynamic nature of contract work makes paper-based records a thing of the past. Given the fast pace of hiring a temp, it becomes more and more essential for enterprises to have pre-approved contract templates at their fingertips. Second, these templates can be edited on the fly from any web browser  with an Internet connection through a secured login.

By improving visibility of who has access to the contracts, you can stay on top of every change and keep a log of who made them. Third, you can receive timely email alerts if any changes fall outside established ranges. Therefore, increasing maintaining a sustainable and secure admin process. Finally, you can stay on top of any payment, renewal and expiration dates with reminders and to do lists built into the system.