Fortune 500 Retail Company Reinvents their Contingent Labor Compliance Program

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Industry

Specialty Services

Number of Employees

60,000 employees

Company Revenue

$13 Billion

Areas Served

United States, United Kingdom, and China

Doubled

Program Growth Year over Year

Total

Risk Mitigation Achieved

SITUATION

From Misclassification to a Managed Program

A Fortune 500 retail company based in the Midwest was struggling with contingent labor compliance. They were beginning to see heightened awareness around worker misclassification at a federal level and realized that state and local governments were missing out on potential revenue due to misclassified workers. This knowledge inspired the organization to take a closer look at their own classification practices. They quickly realized that their current systems were putting them at risk for co-employment and independent contractor reclassification. They needed a stricter background check system and a way to compliantly engage a diverse population of freelance workers.
GATE

As a result of this program, the client's SVP of Procurement won a corporate award for his work in risk mitigation.

SOLUTION

Improved Visibility through Program Transparency

The organization initially used a combination of VMS and MSP providers to manage independent contractor sourcing and engagement. MBO discovered that the majority of their 1099 workforce-which consisted of everything from IT professionals to models and photographers-did not meet the standard level of self-employability to qualify to work as a 1099 independent contractor. This put the organization at risk for worker misclassification and made it difficult to systematically drive cost-savings opportunities. MBO helped the organization develop a variety of engagement programs that fit the diverse needs of their independent contractor population. This helped create better cost visibility because independent talent did not have to go through a variety of agencies to work with the organization-there was now a single point of entry. This created a win-win situation for the organization and for talent: it mitigated misclassification risk for the company and contingent workers were able to work the way they wanted.

RESULTS

Total Risk Mitigation Achieved

For the organization, mitigating risk was about more than just facilitating compliance. The company now has greater program transparency and cost visibility for all managers who engage independent talent. Any contingent talent who come on board receive a background check to ensure they are properly badged for security clearance and that they carry required business insurances. With the new compliance program in place, spend under management has increased, and the organization has minimized reclassification risk as well as other business liabilities. The SVP of Procurement even won a corporate award for work on risk mitigation. In the future, the organization plans on expanding manager and independent contractor education on the benefits of a comprehensive compliance program and growing their access to skilled, independent talent via direct sourcing.

Industry

Specialty Services

Number of Employees

60,000 employees

Company Revenue

$13 Billion

Areas Served

United States, United Kingdom, and China

Doubled

Program Growth Year over Year

Total

Risk Mitigation Achieved

THE TEAM

MBO-Bob-Lucas-2@2x.png

Chief Enterprise Solutions Officer

Bob oversees client relationships, sales, and sales operations for MBO's enterprise acounts. He has more than 25 years of experience in the contract workforce industry.

THE TEAM

MBO-Bob-Lucas-2@2x.png

Chief Enterprise Solutions Officer

Bob oversees client relationships, sales, and sales operations for MBO's enterprise acounts. He has more than 25 years of experience in the contract workforce industry.

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