Image credit: Manataka.org
In the first post in this series, I cited a Workforce Management article that highlights the recent trend toward contingent hiring as a replacement for — rather than a supplement to — bringing on regular W-2 full-time employees. It’s worth stepping back for a minute before getting into some of the added risks that the movement to 1099 contingent workers can bring by looking at some of the trends driving this movement in the first place. Consider, for example, how both manufacturing and non-manufacturing companies are becoming increasingly dependent on outside services providers. Regardless of industry, there is an upward trend in relying on external vendors and business partners for everything from IT support management and functional outsourcing to blue-collar contingent labor.
These trends include, according to our Spend Matters Compass Research (done in conjunction with HCM Works) on the subject, the fact that “manufacturers are looking to become more nimble, and are therefore considering new outsourcing options (from their shop-floor IT infrastructure to manufacturing/contract manufacturing partnerships),” as is the case with the BMW example mentioned in the first installment of this post. Moreover, “Services providers are changing their business models to adapt to a new services paradigm (e.g., firms like Accenture are increasingly hiring contingent workers or doing work offshore versus staffing consulting projects with their own in-country resources) with less quality control than before.”
Despite the speed with which business is moving companies in this direction, we’re often focused less on the potential business risks (including Federal employment rules and regulations) than we should be, especially in an activist Federal environment where Democrats, who still control both the Executive branch and the upper and lower halls of Congress, have traditionally put the interests of labor and workers ahead of business…
