Table of Contents
Background and Organizational Issues
The economic upheavals of the 1980s have had a well-documented and long-lasting effect on the way business operates. One result of this change in the business climate is that temporary personnel are being utilized with increasing frequency. The trend to using temporary personnel or contract workers is driven by three main factors:
Selecting and Evaluating Personnel and Services
Contracting temporary personnel, being a relatively new endeavor for purchasing, requires standard procurement skills, plus a little "homework." The core competencies of costing, negotiating, and contracting are still central to this type of purchase. A knowledge of basic human resources practices rounds out the skill set needed to make capable decisions about hiring temporary personnel. These new understandings include an awareness of psychology and motivation, labor relations, and communication and interpersonal skills. Armed with these, purchasers will be able to make informed decisions about selecting and evaluating contract workers.
Legal and Tax Issues
When you are contracting for temporary personnel, it's vital to understand the legal and tax issues involved so that you do not put the organization at risk. There are many laws and rules that govern the definitions of a regular employee of an organization and of a contract worker. Understanding these issues is important both for tax purposes and for protection against lawsuits, such as those that might be brought for wrongful termination or injury on the job.
LEE KROTSENG, C.P.M.
Lee Krotseng is area purchasing manager for International Purchasing Service, Detroit, Michigan. Mr. Krotseng was a workshop presenter at the NAPM 80th Annual International Purchasing Conference in Anaheim, California, and is a seminar leader and frequent speaker on purchasing and materials management topics, as well as being the author of several articles in this area. Mr. Krotseng is currently professional development chair and C.P.M. study review instructor for NAPM—Tri-State.
Additional material was furnished by Lynne Salisbury, a human resources specialist with a major New York City publishing firm.
- HR Magazine, Summer 1993, "Legal Report," Society for Human Resource Management
- NAPM Insights, February 1995, "Misclassifying an Employee as an Independent Contractor"
- NAPM Insights, February and March 1995, "Hiring the Ideal Purchaser"
- NAPM Insights, May 1995, "Setting Employee Standards"
- NAPM Insights, June 1995, "A Statement of Work Primer"
- NAPM Insights, October 1995, "Picking a Winning Service Provider"
FOR FURTHER READING
- Arthur, Diane. Recruiting, Interviewing, Selecting and Orienting New Employees. Amacom, 1991
- Crook, Mary, Ed. AMA Handbook for Employer Recruitment and Retention. American Management Association, 1992
- Dorio, Marc. Staffing Problem Solver for Human Resources Professionals. John Wiley and Sons, 1994
- Fitz-enz, Jac. How to Measure Human Resources Management. McGraw-Hill, 1984
- Guide to Hiring Independent Contractors. California Chamber of Commerce, Sacramento, California
- Lammermeyer, Horst. Human Resources, the Key to Quality. Quality Press, 1990
- Nation's Business, August 1993, "Contract Workers: A Risky Business"
- Preston, Paul. Employer's Guide to Hiring and Firing. Prentice-Hall, 1992
- Purchasing, August 17, 1995, "What To Look For In Temp Help Suppliers"
- Urquhart, James R. III. Independent Contractor vs. Employee, Revised Second Edition. The Fidelity Publishing Corporation of America
Here are some ways to obtain further information about contracting temporary personnel:
- Internal Revenue Service: 1-800/829-3676 for information, especially manuals 8463 and 3142-01. Form SS-8 helps you determine a worker's status. On the Internet, the IRS is at http://www.ustreas.gov:80/treasury/bureau/irs/irs.html
- Federal and state government: check your phone book for listings for tax and labor departments. The Federal Information Center can be reached at 1-800/688-9889. The federal government can be located on the Internet at http://iridium.nttc.edu:80/gov_ves.html. This site has links to most federal departments and bureaus.
- National Association of Personnel Consultants, Roundhouse Square, 1432 Duke Street, Alexandria, VA 22314 (703/684-0180)
- National Association of Temporary Staffing Services, 119 South St. Asaph Street, Alexandria, VA 22314 (703/549-6287)
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