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Finding the Right Contingent Worker

AS CEO OF ELASTICITY, YOU ARE GREATLY CONCERNED about the possible implications of replacing so many of your permanent employees with contingent workers. Putting aside the individual impact this will certainly have on your remaining permanent employees, many of whom have worked for the company for years, you wonder how you will find qualified candidates to fill these positions in such a short period. You realize the success or failure of this initiative will be determined by the company’s ability to successfully implement this next step in the process. You set this as the company’s top priority.

With respect to those tasks or functions you have decided to place in the hands of independent contractors, you have a choice of finding such people yourself or with the assistance of an agency that can, for a fee, refer qualified candidates with the required expertise. In either case, as we have noted before, your relationship with the contractor will be set by agreement; the contractor will not be your employee. While there are fewer concerns and legal risks regarding the hiring process for contractors versus employees, once retained your organization will need to respect the independence of the contractor or face the unpleasant possibility of creating an unintended employer-employee relationship, with all its associated obligations and liabilities. Your focus should be on selecting the best person to perform services in your organization based on their credentials, experience, reputation, and references.

Staying Properly Involved

In cases not involving independent contractors, the primary responsibility for hiring contingent workers should lie with the staffing agency, but you need to pay attention to this process as well. The staffing agency’s hiring processes can have a critical impact on the success or failure of your contingent worker strategy. It is vital to partner with an agency that has the level of expertise and sophistication necessary to ensure that your organization’s goals and expectations are met. We will discuss this more in the next chapter.

Be careful to select an agency that you can trust to know and follow the myriad federal, state, or local laws regulating the hiring process. In some instances, your organization may be held accountable for the sins of the agency. Even more important, you must avoid asking staffing agencies to do things that might violate those restrictions in their search to find the right contingent workers for your organization.

In general, the client organization may set requirements and establish criteria that the staffing agency must use in recruiting and selecting employees, including requiring that the organization’s pre-employment hiring standards are applied. The organization may request that the staffing agency provide the name of any applicant or employee who has identified the organization as a previous employer and who may be disqualified from working at the organization for some reason relating to their prior service. The organization should not otherwise participate directly in the selection process.

How the staffing agency recruits these workers is important, especially if they are going to become a feeder pool for future permanent employees. It is good practice to require that the agency’s recruiting sources for contingent workers be consistent with the organization’s own outreach initiatives and goals. For example, if the organization is subject to affirmative action requirements by virtue of being a government contractor, or has diversity goals under some other program or mandate, this should all be made known to the staffing agency and reflected in its overall recruiting efforts for contingent workers.

While they may impose additional up-front costs, taking these steps at the beginning of this process can prevent problems from appearing at the end. This entire process—from recruiting contingent workers to hiring them as permanent employees—can take years to come to fruition, and correcting systemic problems can take just as long.

Obviously, if an organization is hiring contingent employees for a brief period to perform simple tasks, or if future permanent employment is out of the question, this may not be quite so essential, because this hiring scenario would have no impact on the potential future workforce of the organization. However, even under such circumstances, there still may be certain hiring criteria that should be enforced to protect your organization.

The following are some examples of contingent worker recruiting and selection processes that should be compatible with your organization’s processes for hiring permanent employees. Again, it must be stressed that the parameters you work out with the staffing agency for vetting candidates must be in compliance with applicable legal restrictions on the gathering and use of such information.

It is important that these pre-employment screening requirements are consistently applied concerning contingent workers. Don’t allow these processes to become sporadic or nonexistent. Because these functions are the staffing agency’s responsibility, it’s easy to lose touch with how consistently they are applied. You don’t want to have a false sense of security, assuming these requirements have been met when in fact they may have not been. Requiring staffing agencies to verify in writing on a regular basis that these procedures have been followed can help ensure compliance to these requirements and give you peace of mind.

Staffing Agency Employment Application

Although there are many limitations on what can legally be asked of an applicant for employment, a formal application is still an important and useful part of the employment process. It should be the first step completed; a good application may make screening applications more efficient by identifying certain disqualifiers for employment or opening the door for further discussion should a job interview result from the application. An employment application also provides a job applicant with the opportunity to certify that the information they’ve provided to the prospective employer is accurate to the best of their knowledge. This can become very important should discrepancies be discovered after the applicant has been hired.

It is important that the staffing agency use its own application rather than that of the organization, for reasons previously mentioned. However, the organization can provide input to the agency on information it feels necessary to include to hire qualified candidates.

Background and Credit Checks

Many organizations require background checks for their permanent employees, and require the staffing agency to similarly screen contingent workers assigned to their facilities. Again, this should be the sole responsibility of the agency.

A credit check can also provide information that could influence whether an applicant should be hired for certain positions. An example would be conducting a credit check on a contingent worker who may be responsible for certain financial matters or handling money as part of the responsibilities of the position. If an individual has been convicted of embezzlement, is deeply in debt, or has other significant financial problems, they may be more likely to mishandle the organization’s money and thus could be disqualified from employment consideration.

These are examples of the type of hiring guidelines that can be provided to a staffing agency to ensure consistency in the hiring practices between contingent workers and the organization’s permanent workforce. The staffing agency is permitted to use the same background check supplier as the organization but should have a separate account and billing arrangement. It should also review and make hiring decisions based on the reported results separately from the organization.

Drug Testing

There are also certain positions that may require drug testing to meet the federal or state requirements, such as those involving driving vehicles over a specific size or weight. Many organizations require all applicants to undergo drug testing as part of their pre-employment screening process for many other reasons, including protecting the safety of their workforce and surrounding community. It would be illogical to only require permanent applicants to be screened and not contingent workers as well if the main objective of this testing is to help prevent anyone from working under the influence. Permanent employees and contingent workers often work side by side in similar positions, and in many cases around the same potentially dangerous equipment, processes, or chemicals.

Also, many organizations require unannounced random drug tests conducted on their employees to help ensure that once hired employees remain drug-free. For the same reasons that random drug testing can be an effective deterrent for permanent employees, it should be required of contingent workers. Again, this process for contingent workers should be the sole responsibility of the staffing agency. The organization should not be involved except to require that such a process be conducted for these contingent worker candidates consistent with its own requirements.

Social Media Screening

Most employers today use social media to help them identify candidates or prescreen applicants. There is a growing expectation that candidates for employment will have an online presence. These screenings are used to verify qualifications, ensure that candidates don’t have disqualifying information about themselves posted, and to see what others have posted about the individual. Social media screening must be carefully designed to avoid claims that candidates are being rejected based on impermissible criteria such as age, race, disability, sexual preference, nationality or religion.

Candidate Assessment Tests

Many organizations utilize validated assessment tools to help ensure that the candidates they are considering for employment have the personal characteristics necessary to be successful on the job. This can be a good predictor of future job performance, identifying potential job fit problems even before they occur. Assessment tools available today can be focused on specific desired characteristics, such as likelihood of retention, that they want to find in applicants. The staffing agency may utilize the same outside resources as the client organization, but must have a separate account and billing for these services. Additionally, it should not share the results of any assessments with the client.

Other Pre-Employment Screening

There many other types of pre-employment screening (including those relating to an applicant’s legal right to work in the country) that may also need to be implemented, depending on the nature and business of your organization. These screening requirements should be reviewed with both human resources and the staffing agencies to determine which would be applicable to contingent workers.

Interview Processes

Many organizations, including staffing agencies, have developed sophisticated interview processes to help them make the best decisions when selecting candidates. They may have hired outside employment specialists to develop pre-employment job testing to screen applicants, or they may have developed their own interview processes and questions. The organization can provide information about its own selection process and refer the staffing agency to outside experts on interviewing techniques, but should not become involved in the process in any other manner.

Ensuring that the staffing agency implements these pre-employment steps at the beginning of this contingent employment process can prevent problems from appearing later. Often contingent workers gain the support of your workforce after working together over time; your workforce may believe that they deserve to be hired as a permanent employee by virtue of their abilities, work effort, and service. This can create ill feelings if an opportunity arises to convert a contingent worker to a permanent employee and they can’t meet the organization’s pre-employment requirements.

This same problem could exist if you retain an independent contractor with the possibility that the arrangement could eventually result in permanent employment. Because a contractor is not put through the normal hiring process, you won’t necessarily know if some impediment to permanent employment may exist. Making sure that an independent contractor interested in permanent employment is aware of your employment requirements and screening procedures could help avoid any problems you might encounter later on.

Attracting the Best Candidates

Even though these candidates for employment are not your employees, you obviously will have an interest in the staffing agency hiring the most qualified people to work in your organization, especially if there is a possibility that they could become part of your permanent workforce. If permanent employment is a possibility, this should be communicated to candidates for these contingent worker jobs by the staffing agency, in a way that does not make promises or assurances of future permanent employment. This can have a significant impact on the quality and qualifications of the applicant pool for hire as contingent workers for your organization, as well as these workers’ attitudes and motivation about their jobs once hired. If such a possibility exists, many applicants may be willing to accept contingent employment when they might not have otherwise.

An advantage of this strategy is that even though they are not your employees as contingent workers, you have the opportunity to see these individuals at work over time. This is likely more valuable input than any other selection process could ever provide in helping you ultimately make a permanent employment decision.

Even if you don’t envision permanent employment for your contingent workers, it is still important that you are staffed with competent people. Sometimes contingent employment can be for an extended period, even years, so the staffing agency still must select the best qualified candidates.

If permanent employment is not a possibility, you should be careful to avoid creating the impression that it is. Not only would it be unfair to allow these individuals to believe that there is a possibility of being eventually hired as a permanent employee; creating an expectation of consideration for future employment can lead to legal claims by disappointed applicants.

Even if permanent employment is not a realistic possibility, you should work with your staffing agency to make sure the wages and benefits it is offering are sufficient to attract the kind of workers you need. Additionally, ensure that the opportunities offered by contingent employment with your organization, such as the type of training and experience that will be available, are being effectively leveraged in the agency’s recruiting efforts.

One way to do this could be to ask the agency for an analysis of how its wages, benefits, and retention rates compare with similar agencies filling similar positions both nationally and in your vicinity. You can also review their job postings to ensure that the nonmonetary advantages of the experience they will get working at your facility are adequately described. Sometimes, being provided the opportunity to work in a positive, employee-friendly environment can mean as much or more to a worker than any other nonfinancial factor. A well-deserved reputation in the community as being a great place to work, when touted as part of the agency’s recruitment effort, can help attract the right contingent workers.

Practical Applications

•  Make sure that all staffing agencies you work with understand the qualifications required to perform the contingent jobs in your organization.

•  Ensure that these staffing agencies have the expertise to understand what is permissible concerning their employment screening practices.

•  Avoid getting directly involved in a staffing agency’s recruiting and selection procedures.

•  If you require staffing agencies to verify that certain pre-employment screenings be reported to your organization, set up specific intervals for submission of these reports to ensure compliance.

•  Advise your supervisors and managers on how to respond to questions from contingent workers concerning the possibility of being someday hired as permanent employees without making definite or misleading commitments.

Questions to Consider

•  What if you find that you are not satisfied with the quality and qualifications of the contingent workers provided to you?

•  What recourse do you have with the staffing agency providing these workers? (Hint—you will want to make sure that you can verify that the issues are performance related.)

•  Conversely, what if you find that the contingent workers or independent contractors assigned or hired to work in your organization outperform your permanent employees? What would you do and how would you address this situation?