A Short Guide to Outsourcing for Small Business
Most businesses will know about the benefits of outsourcing even if they’re yet to engage the services of an independent contractor. Numbering at over one million in Australia, independent contractors form a significant part of the local workforce. With the availability of contractor management services, outsourcing is fast becoming a cost- and time-effective way to access new skills.
Key Advantages of Outsourcing
- Staffing costs. Independent contractors are an efficient source of specialist skills and time.
- Capital costs. While the reduction of staffing costs are often cited as a key benefit outsourcing, reduced capital costs can also present as a major advantage. Through the reduction of staff requirements as well as access the appropriate capital (such as equipment) through the independent contractor, businesses can reduce the need for additional capital outlays.
- Risk reduction. Contracting out a role can help reduce risk as the contractor assumes risk that arises from sources such as market fluctuations, changes in regulation, or changes in technology, on the business’s behalf.
- Time saving. Outsourcing allows businesses to save time in order to focus on core business activities.
Strategies for Finding the Best Employees
There have been enormous amounts of research conducted on the recruitment process and on how businesses can find the best employees and reduce turnover. Studies have been conducted on the efficacy of assessment testing, asking open ended questions, motivation versus skills, and much more. While businesses can adopt different strategies along the way, much of the process remains the same. Along with optimising the interviewing process and effective contractor management for organisations using contractors, we look at some of the core strategies for finding the best employees.
1. Conduct Position Analysis
Every successful recruitment strategy begins with a position profile and analysis. Managers and/or the HR department will identify what the position entails, its key responsibilities, teams, workflow, and accountability (who will supervise the role). Other factors, such as anticipated future needs and the organisation’s overall strategy, may also be considered.
7 Part-Time Employee and Contractor Management Tips
According to the Australian Bureau of Statistics, there are over 3.4 million part-time workers (as of September 2011) and around 1.1 million independent contractors (as of November 2011) in the Australian workforce. Along with full-time employees, contractors and part-time workers are the most important components of the work force. This article covers seven important areas for businesses who use contractors and employ part-time employees.
1. Pre-Engagement Screening
Start out with a clear job, duty, or project definition as you would with a full-time position. This ensures accuracy as you make recruitment and contract decisions. Screen part-time employees as you would a full-time staff member and use contractor compliance services to confirm that contractors meet the appropriate licensing and insurance requirements.
Although you may have limited contact with these partners and staff members, avoiding treating these positions as ad hoc will facilitate better resource management at a further stage.
Top 4 Business Time Management Strategies
Effective time management is a vital component of sustaining productivity and competitive advantage for organisations of any size. In this article, we look at four ways to boost time management in your business.
1. Using Outsourcing Services
No business operates as an island unto themselves and outsourcing is one of the most common ways for businesses to partner up with other entities. Outsourcing allows businesses to access specialist skills, reduce expenditure, and save time. Accounting, legal, and contractor management services are three common outsourcing partners for businesses, whether large or small.
How and when you outsource will depend the nature of your business, but when it comes to compliance issues such as filing tax returns or contractor compliance, outsourcing is usually much more cost-effective than in-house work. In these situations, outsourcing minimises the risk of error, delay, or even penalty.
5 Vital Outsourcing Partners for Small Business
From the sole trader to family businesses and the business with 15 or so employees, there’s no business that’s too small to benefit from specific advice or expertise from outsourcing partners. Whether it’s a tax specialist, a marketing professional, a solicitor, or a contractor management service, your business deserves the occasional (or regular) dose of independent advice and know-how. These are five vital outsourcing partners to consider for your business.
Accountant and Tax Specialists
An accountant can bring valuable insights for tax returns and exemptions, business record keeping, and forecasting – all of which lead to better performance and sound decision making. You may obtain advice on how to free up cash flow which can provide you with more opportunities for expansion and investment.
Step-By-Step Guide to Effective Contractor Management
Contractors form around 1.1 million or nearly 10 per cent of the working population in Australia. As increasing numbers of businesses turn to contractors to access specialist skills and free up resources for core business activities, awareness about contractor management and compliance are more important than ever. Use this practical guide to the key steps in effective contractor management and compliance.
Engagement
Finding the right contractor for your job from the outset will save you inconvenience and reduce the chance of delay. Before you engage a contractor, check that they meet licensing, tax, qualification, insurance, tax and business structure issues, and safety requirements. Using a contractor compliance service can ensure that the appropriate checks are made before you sign the agreement.
7 Proven Strategies for Business Growth
Successful businesses go through stages of expansion that can be both exciting and challenging for entrepreneurs. While your individual expansion plan will depend on your industry and niche, these seven strategies can be used to boost and manage growth for any type of business.
1. Focus on Core Business Activities
For the growing business it’s easy to get side tracked by non-core business issues such as compliance, tax or contractor compliance. While these issues are vital to managing risk and meeting legal requirements, they may require specialist knowledge and considerable time, which can lead to businesses losing focus when it comes to core business activities.
Sky Rocketing Demand for Project Contractors
A recent study has found a growing trend towards using a small group of core permanent staff and engaging contractors for individual projects. While the use of contractors has always been common in industries such as construction and plumbing, the study shows that project-based contracting is an expanding force in a range of service industries. These include accounting and finance, information management, human resources, and risk management or auditing. We look at this trend in more detail below.
The Growth of Project-Based Consulting
From the industries long associated with contracting such as construction, companies and businesses have move toward outsourcing almost any aspect of their non-core business activities. Contracting has grown in popularity with a more competitive economic environment and the rise of contractor management services, both of which have made engaging and screening contractors and contractor compliance cost-effective and time efficient.
Resolving Disputes with Independent Contractors
Although we’d prefer not to think about the possibility, disputes between contractors and businesses may arise from time to time, like in any business relationship. Screening contractors and effective contractor compliance and management is one way to avoid disputes, but if you happen to find your business in a dispute with a contractor, this guide may prove useful.
Why Do Disputes Occur?
Disputes between contractors and businesses may occur for a variety of reasons. These may include work quality, poor documentations, delays, or poor communication and agreement at the start. There are strategies businesses can undertake to minimises chances of dispute, along with good contractor management during the project’s working life.
3 Tips for Contractor Safety Management
For all organisations, monitoring contractor safety procedures is a vital aspect of contractor management. It helps the business fulfil its duties under respective occupational health and safety legislation such as the Work Health and Safety Act 2012, which is due to come into effect in 2012.
1. Knowing Your Duties
For effective contractor compliance, It’s crucial for businesses to understand their duties with respect to contractors. The model Work Health and Safety Act 2012 (‘the Act’) has been made available to the general public. Due to be enacted in early 2012, the Act codifies aspects of case law and makes duties (among other work health and safety issues) uniform across Australia.
What are Unfair or Sham Contracts?
Unfair or sham contracts are generally those entered into in order to disguise what is actually an employment relationship. Like contractor compliance, the work contract is an important aspect of any hirer-contractor relationship. It’s important for businesses and contractors alike to understand what unfair or sham contracts are in order to create fair, effective, and mutually-beneficial agreements.
Sham Contracts
Sham contracts are agreement in which the employer has deliberated acted to disguise what’s essentially an employment relationship in order to avoid paying employees’ minimum entitlements, such as pay and leave entitlements. In some instances, employees have been forced to enter these sham contracts by threat of dismissal.
Top 5 Legal Risks in Your Business
Risk is an integral part of entrepreneurialism. All businesses come with some level of risk, including legal risk. Awareness of the types of risk is the first step to effective legal risk management strategy. While legal risk will vary depending on your business type, these are some of the most common areas for potential legal risk in any business to stay aware of.
1. Employees and Contractors
Whether you’re hiring employees or engaging the help of contractors, it’s important to take measures to manage any risk that can arise from employee and contractor relationships.
5 Strategies for Reducing Contractor Induction Time
Organisations that hire contractors understand the importance of accurate and thorough inductions, which is one of the vital aspects of engaging contractors along with contractor management and compliance. However, this process can be time consuming. Fortunately, there are ways to ensure contractor inductions are succinct and time effective without compromising on the quality and depth of content delivered. These are five practical strategies for reducing contractor induction time in any organisation.
1. Designing Inductions to Meet Process Issues
5 Things You May Not Know About Using Contractors
Contractors are an essential part of Australia’s workforce, providing labour and skills from more than 1 million independent workers to businesses and households. While most businesses will be familiar with common contractor management matters, there are some things that may not be evident, especially as regulations can vary from industry to industry. These are some of the things you may not know about using a contractor.
1. Contractors have Different Rights and Obligations to Employees
Although most businesses will be aware of this fact, it’s useful to re-examine some of the key differences between the rights and obligations of contractors and employees.
7 Ways to Streamline the Contractor Management Process
Growing numbers of businesses are engaging contractors to access new skills and know-how with more flexibility and efficiency. While contractor management and compliance are central to making good use of the wide pool of talent, effective contractor management can become a complicated and time consuming process for businesses. These are some practical ways for businesses to streamline contractor management and free up time and resources to better focus on core activities.
1. Contractual Guidelines
The Growing Independent Contractor Workforce in Australia
Independent contractors represent a growing segment of the workforce. According to the Australian Bureau of Statistics, 1.1 million (or 9.8 per cent of employed persons) Australians worked predominately as independent contractors as of November 2010. This was an increase from 1.0 million in November 2009 (9.6 per cent of employed people) and 967,100 contractors (9.3 per cent of employed people) in November 2008. In this article, we take a look at this trend and what it means for businesses and contractor management and compliance.
A Growing Force in Australia
The ABS defines independent contractors as employed persons who operate their own business and work under a commercial contract rather than an employment contract. They tend to provide services directly to clients rather than selling goods or services or managing staff to sell goods and services.
Contractor Compliance and Implications for Risk Management
Independent contracting has transformed the way many companies do business. In countries such as Australia and the UK, contractors make up around 10 per cent of the working population. Contractor compliance forms an essential part of business risk management for some businesses. Contractor compliance can be distinguished from the business’s internal compliance program by the fact that the business seeking contractor services is engaging the labour of a non-employee. As such, there are risks different to those associated with standard employees. These can be managed effectively for businesses wanting to tap into the uniquely skilled labour pool of independent contractors. These are some of the ways contractor compliance can form a part of the business’s day-to-day risk management strategy.
5 Elements of Contractor Management
Contractor management can encompass a range of issues, from forming a part of the business risk management strategy to staying aware of occupational health and safety duties. Whether you’re a contractor or a business that employs contractor services, this general guide will help you make sense of the key elements involved.
1. Relationship
For both parties, it’s important to be clear about the nature of the relationship between the business and contractor from the start. While most businesses will probably have a clear agreement and guidelines for the working relationship, more casual working relationships may lead to some confusion, affecting the tax liability of both parties.
Key Tax Issues for Independent Contractors
Special rules apply to independent contractors when it comes to tax. Under Australia’s self-assessment tax system, employees, businesses, and contractors are each required to conduct periodic self-assessments and make sure they’re satisfying contractor compliance requirements in relation to tax regulations. For independent contractors, the following are the key tax issues to be aware of.
1. Business Structure
As an independent contractor, your business structure may be any of the four main types:
Engaging Contractors – 3 Things to Know
According to a 2010 report by Independent Contractors Australia, as many as 18.5 per cent or 1.97 million persons in the Australian workforce are self-employed. Of these, around 1.1 million are independent contractors. Increasing numbers of businesses are making use of contractors for flexibility and to access a wider skill set without taking on a formal employee. From the contract for service, to contractor compliance and safety management, these are some things to know for choosing a contractor, signing the agreement, and managing the contractor process.
1. The Agreement
It’s important to address some key potential issues in the contract of service. While obviously a lawyer should be used to draw up your contract, it’s useful for businesses and contractors to understand the sort of things that should be included.
Contractor Insurance Policies Explained
Due to the special nature of the contractor’s role, it’s important for both the contractor and the business to make sure that the independent contractor is adequately insured. For businesses this assists with improved contractor compliance and risk management. For the contractor, having adequate insurance helps them meet basic legal requirements and ensures that they will be adequately protected in the event of accident or unforseen situations. While insurance requirements may vary depending on the contractor’s industry, these are the most common insurance policies for contractors.
1. Public Liability Insurance
Public liability insurance protects contractors against third party personal injury. Most policies will also cover property damage that may have resulted from some sort of connection with the contractor’s business. Depending on the particular policy, the public liability insurance package may also include the following coverage.
Employee or Independent Contractor – How to Know
With the growing trend toward contracting and other alternative work and employment relationships, it’s more important than ever to be clear about the terms under which you’re being employed, or, if you’re the employer, how you’re engaging the worker. A definitive answer may depend on the specific circumstances and professional advice should be sought where there’s doubt. These are some quick guidelines that can help with differentiating an employee from a contractor and make the contractor management process less confusing.
Employee or Contractor?
In most cases, it’s not enough for each party to have described the work partner as an independent contractor. Where there’s a dispute and there’s no clear agreement on the nature of the work arrangement, the following issues will be taken into account:
Four Tips on Avoiding Liability Issues with Contractors
Businesses working with contractors need to actively manage their contractor compliance issues by addressing the key compliance areas and periodically checking that their contractors have maintained their licensing and other requirements. Although one of the easiest and most cost effective ways to achieve this is by using a contractor management service where everything is managed on your behalf by experts in the field, we’ll look at some ways in which you can avoid liability issues.
Do they have the right insurance?
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Eleven Step OHS Contractor Induction Checklist
A contractor OHS induction checklist helps ensure that your new contractor is aware of all the work health and safety requirements on site. Some contractor management systems incorporate online inductions, which can help save you the hassle of having to manually take the contractor through every step of the process. However, most first days should include some level of induction. These may be just some of the major issues to cover.
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A – Z Guide to the WHS Risks Code of Practice
The How to Manage Work Health and Safety Risks Code of Practice (‘WHS Code of Practice’ or ‘the Code’) is one of the 12 codes of practice in draft form released by the government for consultation.
While all twelve codes of practice are admissible in court as evidence in the event of a breach of duty, this code is the key code for employers, managers, or contractor, for their duty to ensure work health and safety since it is about managing risk. The new legislation will probably affect aspects of contractor compliance.
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Seven Strategies for Reducing Business Risk
Business risk is endemic to all entrepreneurial activities. The inherent uncertainties of the market means business owners and managers are always keen to find out how to adapt and improve their practices to meet the changing environment. Part of boosting competitive advantage is simply to reduce risk, and in turn reducing unnecessary costs and freeing up resources for expansion and growth. From ongoing market analysis, to reviewing internal processes, to contractor compliance, these are the key strategies for reducing business exposure and risk.
Ongoing Market Analysis
Market analyses are common for those starting a business, but fewer companies tend to make it part of their periodic planning. Regular market analyses that analyse current and future market trends can facilitate quick adaption and decision making.
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OHS Duty Requirements Under the New Work Health and Safety Act
The new Work Health and Safety Act (‘WHS Act’) are the result of a review into national occupational health and safety laws. One of the easiest ways to protect your business when using contractors and to save time is to use contractor compliance services to help you keep track of the contractors you work with. This ensures that all the minimum obligations with respect to insurance and safety compliance standards are met, and gives your business a great start when employing contractors.
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Five Tips for Choosing a Contractor
General contractors are licensed to perform almost all aspects of construction while specialty contractors are licensed for specific aspects of building and construction. To make sure you find the right person for the job, these guidelines may help with the contractor selection process.
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Seamless Administration, OHS and Contractor Management
Taxes, interest rates, labour costs, poor sales, competition, the guarantee of quality goods and services — it’s not like business owners don’t have enough to worry about already. When you add the risks associated with contractor management — that is, managing the flow of contractors that form an invariable part of the daily management of any business — it can be enough to drive a business owner insane.
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Staying up to Date with Contractor Management: Bring in the Experts
If you run a business of your own, the chances are you’ll need to hire contractors every now and then to provide services for you. If your business is relatively large, you may require the services of vendors, service providers and other contractors on a regular basis. Contractor management refers to the management of work contracts for these service providers to ensure transactions run smoothly and legal and OHS requirements are being complied with.
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Your Contractor Environment: Handling the Special Contractors
Business owners have many matters pressing on their time. Whether it’s paying taxes and interest rates, managing staff and work flow or simply ensuring that a business remains profitable, the prospect of running a business is undoubtedly as daunting as it is rewarding. One area that many seem to forget, though — but which is just as essential in ensuring efficient administration — is the area of contractor management.
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The Audit Trail: A Built-in Safeguard for Managing Contractors
When it comes to contractor management, one of the most important steps to take is to ensure a proper audit trail is kept. In this article, I’ll tell you why.
But first, what is contractor management?
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Achieve Business Success by Outsourcing Your Work Processes
The growth in contractor management services reflects a genuine demand as increasing numbers of businesses move toward outsourcing. By bringing contractors who not only have specialist skills, businesses minimise expenses with contractors who can provide services more cheaply than permanent staff. From large to small businesses, many organisations are making use of outsourcing. In this article, we look at why outsourcing is growing in popularity, and how you can best make use of outsourcing to achieve business success.
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Should You Outsource that Job?
Outsourcing is growing in terms of numbers and also across different industries. From the traditional industries long associated with contractors, such as building and construction, trades and the defence industry, companies and businesses now outsource legal processes, business processes, administrative job functions, IT and banking tasks. There are clearly enormous benefits that come with outsourcing jobs and functions so long as issues such as contractor compliance are properly addressed. Here we look at some top tips on how to identify the jobs ready for outsourcing in your organisation.
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A to Z of Contractor Compliance
At some time or another, your business may need to engage the services of contractors. Often it can be the best way to bring in expertise and have a project completed quickly. While using contractor management services will minimise your paperwork and ensure that you’ve addressed all aspects of compliance, it’s essential for businesses or contractors to know about the key obligations associated with being a contractor, allowing all parties to be clear about their duties and responsibilities.
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Your OH&S Duties When Using Contractors
While the practical application of occupational health and safety regulations with respect to contractors can be a very complicated issue, it’s useful to look at the key obligations that apply throughout Australia. Even when your business uses contractor compliance services, employers and managers should still stay aware of health and safety issues and general duties of care in the workplace in order to better manage onsite safety processes.
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The insurance angle- Cover saves money
Insurance, in any situation, is a strategic safeguard. The need is for a very strong, reliable range of cover which can handle any incident in the workplace. One gap that is sometimes overlooked is the insurance coverage of your contractors. Some companies try to monitor their contractors insurance themselves. Insurance monitoring is a demanding task, and it needs professional guidance. Best global practice is to engage contractor management services to make sure monitoring is done properly.
Best practice OHS- Getting professional backup when you need it
The best people in business, particularly contractors, are also usually the best and most conscientious in terms of OHS practices. They know their trades when it comes to basic, no-nonsense safety management, and try very hard to enforce these practices. However, the fact is that compliance requirements, technologies, and safety issues evolve and develop over time. Every new situation brings with it some OHS issue in the workplace, and the range of insurance monitoring and Contractor management requirements evolve with these issues.
Top 3 prevention strategies for contractor liabilities
Contractors are liable for a large range of possible situations, particularly OHS, and their standard of preparedness for managing these liabilities varies enormously. The best contractors are good, professional, well-run operations, the worst are abysmal in their health and safety management practices. Contractor management is a great benefit for businesses, because it really can find and prevent problems before they even set foot in the workplace. This is “risk management” in the most practical possible sense.
Risk management starts with contractors
Risk management is an actual science, and with good reason. When dealing with contractors, risk management is particularly complex, and needs expert oversight. Insurance monitoring in particular is a major issue. This area isn’t just complex, it’s also expensive and a major issue in terms of liabilities. Mistakes can be deadly to business bottom lines, and that’s where the experts must be called in, to avoid the real disasters. Contractor management systems are designed to find and fix any possible problems before they reach that stage.
