Best Practices for Contracting Contingent Worker.

Whether you call them contingent workers, consultants, temps, or seconded employees, augmenting your full-time staff with temporary workers is a great way to address the need for specialized talent or staffing shortages.

Although hiring temp workers is a great strategy, there are many risks that need to be considered when you contract contingent staff.  A proper procurement strategy can help mitigate these risks.  Today I want to address the best practices for sourcing and soliciting contingent workers in Design and Construction (D&C) roles.

Scope of Work

One of the biggest mistakes facilities managers make when soliciting contingent staff is writing a scope of work as if they were soliciting an Architect or a Construction Manager.

Unlike typical D&C procurement efforts, the scope of work for soliciting contingent staff should not be task and schedule based.  In fact, the less specific you are about tasks and schedule, the better.  Instead, your solicitation should focus on individual qualifications.

When soliciting contingent staff you need to focus on individual qualifications.  Of course, you may still want to call out specific deliverables, but remember that this is staff augmentation rather than project specific work.  As such, the deliverables may change as your needs evolve.  The thing that wont change is the skills and experience needed to perform the work.

Unit pricing

When you solicit pricing for contingent workers, unit pricing is the best pricing model to use.

Unit pricing can be based on a variety different of units.  Knowing which unit is most advantageous to an owner is important.

Most people solicit pricing on the basis of hourly rates, but hourly rate are entirely unpredictable. This means that there is little to no way for you to monitor or control the amount of expense you will incur.

To reduce the uncertainty of hourly rate pricing, consider using a monthly rate.  Make sure to specify that you are soliciting a fixed monthly rate regardless of number of hours worked.  Do not specify a minimum or a maximum number of hours and do not correlate the monthly rate to an hourly rate.  Doing so will only confuse the pricing model and open you up to claims for additional hours.  Of course you  can use hourly rates to analyze your quotes, but the pricing exhibit in your contract should avoid all mention of hourly rates and number of hours.

Contract provision

Another best practice when engaging contingent workers is to include a contract provision that requires the unit pricing to include supervisory labor.

One of the biggest issues with using contingent labor is the risk of co-employment.  Co-employment is when an individual who is seconded to another Company begins acting and being treated like an employee.

Co-employment concerns are elevated when you provide oversight and direction directly to the individual.  Adding a layer of management alleviates co-employment concerns by ensuring that temp workers receive direction from someone from their own organization.  Your unit price will be a little higher because you will have to pay for the supervision, but you will skirt this legal risk.

There is a lot more to be aware of with respect to co-employment concerns.  Co-employment is really a legal and HR concern, so I will remain brief on the topic.  I do however encourage you to read this article from Bill Inman at www.HR.com .  There are also many other resources on the subject.

Staff Augmentation is a great way to deal with fluctuations in workload and temporary specialized labor needs, but knowing the best practices for procuring these workers is critical to successful deployment of this strategy.  Follow these simple tips and you will set your staff augmentation agreements off to a good start.

Thanks for reading.  If you enjoyed this content, please feel free to browse my previous articles and please like, share, comment, and subscribe.  This helps promote my content and is greatly appreciated.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s