Create an Enterprise-Grade Direct Access Program for Independent Professionals

June 14, 2018 | 1:00 PM - 2:00 PM EST

Content

Topics in the Webinar 

Event Description

Transcript

Featured Speakers

Moderator: 

Alec Music, Facilitator, Safe-thought leadership webinar

Featured Speakers:

Linda Mann, Chief Experience Officer, MBO Partners

Eric Rumbaugh, Partner, Michael Best & Friedrich LLP

Transcript

[00:00:32] Alec Music Thank you so much for taking the time out of your busy schedule to join us in this webinar class. My name is Alec Music and I have the pleasure of facilitating, safe-thought leadership webinar to an entire enterprise-grade direct access program for independent professionals sponsored by MBO.

[00:00:49] Alec Music Today is meant to be active. So, submit your questions throughout the presentation and we'll do our best to get to them. If we don't get them during the webinar. We'll make sure that you've followed up after the webinar. Before I had a few housekeeping items. I'll make it short and sweet and then we'll jump right into the webinar on our quest to cover some of the resources we have at SIG. Take then we have here one of our signature events. We had about 15 in total this year. We still have a few of our remaining for the rest of the year. We look at our schedule and let us know if you have any questions. As you know, since you're on the webinar, we do have webinars. There's one on Tuesday and Thursday, sometimes both days, sometimes one week. I love to have one of our webinars, we have some attention leadership focused and on solution deep-dive focus.

[00:01:35] Alec Music So two different types would love to have you. I have an opportunity to ask members top-of-mind questions and look at our peer-to-peer for a website, you can search by keywords that there's a topic you're interested in and. The center we call it our SIG Google, it has over 5000 tool temples, white papers, presentations, and research stock documents. You can always work or type such as white papers or presentations, which is great for anyone who's looking to fill a job or looking for a new job. You can do full-time work as well as internships. Take a look at her career network. And it's a membership benefit to be able to offer opportunities on the Career Network. We'll promote them through a weekly blog that goes out on Monday, due to an outbreak. This is an opportunity for you to find talent within the community or come to the summit. I think we had about 10 to the last summit and we're going to continue to hopefully do that.

[00:02:34] Alec Music The event Global partnership summit, the new first one Beroe. We have Art of Procurement and HFS, if anything about these partnerships and how they can help you. Just send us a quick note and we'll make sure to explain that to you. SIG Presentation is aware of our global summit. We have a 2-year that's for usually March or April timeframe and the fall is not October, our next one at Rancho Mirage, California, the week of October 15th. We hope to have you here.

[00:03:11] Alec Music The certification program, oops! That flies over. SIG University's vacation program, we have several different types of classes. We have 2 starts in July and then restart back in September. And then we're also starting our new program in September. So there's no question about the SIG university for your workers to start. Jumpstart writes a webinar, so this is sponsored and presented by MBO, so we have speakers. I'm going to be a short bio for both of them. First one on demand. She is from MBO. She's Linda Mann, back in 2017, and later directs the Independent Sales Program and Internet Business Unit. Prior to that, she spent seven years with the director for PwC, responsible for leading several enterprise-wide initiatives. She called design development and launch of the PwC Talent Exchange, which is a place connecting top independent talent with workforce opportunity. Before PwC, she spent 5-15 years as a management consultant.

[00:04:17] Alec Music And the second speaker on this presentation, Eric Rumbaugh. He advised clients in all areas of labor and employment law. He is now recognized law practice in the area of contingent labor, investment review procedures, and contracts. We are still on the presentation of facts and would love to have you kick start the day. Thank you!

[00:04:39] Linda Mann Right, I'll go and get started. Thanks, everyone, for joining. Let's see, how do we get to my next. Great, thanks. Although we have a handful of slides here, quite honestly, as folks have questions throughout, please feel free to submit them.

[00:04:57] Linda Mann I think it's really nice to know it's an active discussion, so I'm happy for the interruption.

[00:05:03] Linda Mann So a couple of tips here. Just to up GI folks go down this path and then the rest of the slides are those around, I think about eight of them, which really talk about as we went down this path, what things to pay attention to, like what are the minefields where they fall apart or specific sort of things that you can do to ensure that a program around direct sourcing will be successful.

[00:05:32] Linda Mann At the highest level if found very compelling and interesting. And it's certainly the right direction to go. But there's I find there's a lot more to it than meets the eye and folks don't realize it until they get into the middle of it.

[00:05:44] Linda Mann So this is meant to give a sneak peek into some of the lessons I've at least experienced firsthand in terms of trying to direct sourcing program.

[00:05:54] Linda Mann So there's a couple of slides around why, and I think the first one is really important. I think, you know, cost obviously is an element of it. But also I think and I'm on this call recognize this, but there is a war for talent in that the really high-quality premiere talent has a choice. So they are getting multiple opportunities presented to them. And you want a way to attract that top notch talent, just like you do things to attract top notch, full-time employees. You really just think about that inherent talent the same way. In fact, many of those folks have even more options on the table in  front of them.

[00:06:31] Linda Mann So you just figure out what are the things that would entice them to work for you. What are the things you can do through a direct sourcing program enables you to develop the right types of relationships with them so that when you wake up in the morning and want to come work for your company and not somebody else.

[00:06:55] Linda Mann Obviously our economics are doing this right, and I think this is probably what a lot of times first draws folks into this, which is decrease costs by primarily the economics forces, really cutting out some of the labor force. So instead of buying through these other middlemen to get to that talent, you can go directly to them. And that is typically your biggest cost savings. And I think, again, that it leads to that sort of creating the direct connection and building the relationship.

[00:07:22] Linda Mann But I think that's typically why people go into this, is they really want to cut out those middlemen markups, which I mean, you know, they can run easily into the 40 percent. So if you can, which reduces that makes a very appealing program.

[00:07:36] Linda Mann Keys to Success,  have you start doing this? what are those things that you should pay attention to? And really keep your eye out to make the program successful? The thing I'll say is the right leadership to perform. It's not someone who just gives it lip service, but it's really having the right influential leaders who have very specific, measurable targets. And there are implications for not meeting them and visibility to it.

[00:08:09] Linda Mann So it can't be someone saying we believe in ourselves when we need to do it. There need to be specific actions that are taken to promote it, specific actions that are taken when folks are not going the right path and utilizing this program the way they should and really making sure that, you know, demonization has visibility into progress against those saying, you know, who is really pulling their weight here and who isn't and really being able to not be me. But call folks out. Right. And make sure that you're really driving the right behavior. If it is, something has to be driven from the top down is very hard to push this up from the bottom.

[00:08:51] Linda Mann He is made it easy for managers, so this is not their job, their job is not to go out and find talent to do work. Their job is to complete whatever task they have at hand. Typically, this is just something they have to do to get their job done so they're not overstood in it. It's a little bit of a hassle, right? They don't do it all the time. So every time they go to do it, they have to go back a bit of a learning curve. Make it easy for them. Don't make them go to multiple systems to have five different people. They have to talk to make the process as simple as possible.

[00:09:28] Linda Mann I know it's hard to that because typically binging on independent talent is complex. There are so many moving parts to it and so many things involve you have to manage. Sometimes you can make it simple for them that is critical. Don't give a reason to not want to go down this channel, make it as easy as possible for them to really monitor it, have checklists where you can see where there are bottlenecks. So you understand where folks are getting held up and address those.

[00:10:02] Linda Mann A popular debate, so what comes first, the chicken or the egg?

[00:10:05] Linda Mann So is it that as you're building a direct sourcing program and you're trying to create a critical mass among strangers on the town, do you have talent in their first or do you get the open racks in their first?

[00:10:19] Linda Mann While getting the talent in their first for a variety of reasons. Number one, and Internet talent are used to the idea of having a presence in a variety of marketplaces so they'll create their profile and they'll monitor it.

[00:10:34] Linda Mann But they typically always have an expectation that immediately you will have an open position for them. So they're adaptable with that sort of waiting that happens.

[00:10:46] Linda Mann The managers, however, when they have an open need, need to get it filled immediately. If you don't have the talent already in there, you will have lost them and you've lost an opportunity to really get another supporter for your program.

[00:10:59] Linda Mann Also, I tell you that nothing will attract the managers to your marketplace better than a group of really high-quality talent that they can quickly access. So it just serves as a bit of a magnet for those managers when they see that talent there that they could quickly deploy to any open positions they have.

[00:11:25] Linda Mann Matching. There are a lot of folks out there that talk about AI, machine learning, algorithms, and automated matching, and how you're using independent tells all about technology.

[00:11:39] Linda Mann Technology helps but I will tell you that I think matching is more of an art than a science. The automated logic will get you so far, but there are so many nuances to matching an individual person to an open need.

[00:11:55] Linda Mann For example, if you're looking for a programmer. Yes. You don't want someone with 10 years of experience, but maybe you want someone that's a really strong executive presence. Or maybe you want someone who has experience in working across three different countries or who has worked with other professional service firms. Or who has experience with working in certain types of situations or working with offshore facilities? There's there are so many nuances.

[00:12:18] Linda Mann And also what happens is typically the managers have an idea and criteria in their head that don't always make their way into the job description. There are places where they're willing to give and take. You really need to have a human element in there to really find a Tab that can match what that person is looking for.

[00:12:43] Linda Mann A lot of people think, oh, if it's just contract talent, it's really easy to fill the role. But I think the work that needs to go into matching an independent professional to an open position is the same as what you would use for a full-time position. It may be that you're not looking at the person in terms of their career potential, but actually in some ways you're more critical because everyone expects an independent consultant to immediately jump into a job and get to work. They don't expect to have to take some of a learning curve and to train them.  We're less forgiving on the skill side. It's even more important that those expectations and those experiences are accurately understood by everyone and that we were applying to match who meets that criteria.

[00:13:45] Linda Mann Otherwise, the thing I would say is. Let it come to you so if you get from a pure numbers perspective within your own situation, you'll always have there were open positions that rare talent who could fill it right. And trying to navigate through all the talent that could possibly fill your role can be a really daunting task. And I would suggest do what you can to try to find a way to let the talent open to you and to be able to find your open positions and be able to come to you because you're the best one to know whether or not they can fill a certain role.

[00:14:27] Linda Mann They also know whether or not they're willing to travel with a location. They also know whether or not they're available and so on. Instead of trying to cut across all the different ways talent may present themselves to you and the various types of information you have and how do you choose across 10 people that all look exactly the same and understanding who's available. What you can to make your needs public and discoverable so that as talent is looking for work that could align with what you're looking for, they're able to find you. It's much easier to start from a pool of candidates that have opted into your open needs, to try and go out and canvass the entire pool of that could be an option.

[00:15:11] Linda Mann All the ones who I would mention, train them to you and getting them to come to you when they go and up and roll. There's a big part of that is dependent on your friends. And so make sure that you're part of that and also can't talk. It's funny because you will work with these clients, will post an open position, will go to you, and will use people. They all know about the company. Right? They know someone who's worked there. They know about how independent consultants are treated at the company. So be careful because they're the reputation of the firm is really important. And it's sort of a small busy at times as you're working with this various independent consultant.

[00:16:09] Linda Mann The other two is it sounds appealing to cut out the middleman and then just directly deal directly with it, but be careful what you ask for. Because once we do that. That's the beauty of it is, if you have this direct connection with the top, you have to build a direct relationship with them. You're able to turn to them and interact with them and use them again whenever you want, going directly to them.

[00:16:35] Linda Mann At the same time, you're engaging in a relationship with, then you need to constantly nurture that and be sensitive to it. So make sure that you know the beginning. You're setting the right tone in terms of how you interact with them and really setting a precedent for why they're valuable and creating that sense of relationship. Everyone in the firm has to lead and treat them that way. When you talk to independent talent and you ask them if they do this and what's really important to them.

[00:17:07] Linda Mann Being viewed and treated as a member of the team is probably one of the things they care about the most and what makes them really want to work for another company. So, be sensitive to treat in that way.

[00:17:19] Linda Mann It sounds sort of obvious and it's just sort of human nature. I think a lot of times for somebody, we think working with independent talent, certain things would apply. But all things that are really important, in terms of how you would treat a colleague who's a full-time employee really lie the same to independent talent.

[00:17:45] Linda Mann And the last one before I handled it to Eric, what I say is this key, a really big undertaking. And if you're going to, as we said, start with having the talent first and having the opportunities come in. There's no way you can launch this and have enough talent to meet all of your needs. You need to think about being really focused. So pick a few areas where you anticipate you're going to have demand. Work the folks that would demand in those areas.

[00:18:23] Linda Mann What are the kinds of talent that they're looking for? What is it really important criteria for quality talent for might get talent in the marketplace for them? Those folks have openings in those areas of work.

[00:18:37] Linda Mann Hold their hand, give them a white-glove treatment, help them have a successful experience, and get their needs filled through your program with that talent. Then monitor and learn like crazy the entire time because there's a ton of learning. There are so many things that you'll never anticipate are important until you actually get into this. There are so many sorts of flaws and pitfalls in your process that'll really get at play as you go through this. I would really encourage a more of a pot approach, engaging with folks that will be champions for this.

[00:19:13] Linda Mann As a fact and you know, where you can really sort of start to get some success and then you want to really publicize that like crazy. Because none attract additional users and managers than word of mouth. Other managers hearing about what a great experience is, what they call a talent they were able to get from this direct sourcing program. So you want to be thought out small, set yourself up for success. And really promote the heck out of it.

[00:19:48] Linda Mann I'll be out here and hand it over to Eric and all I will say that this all but you have to do all this with an eye to how to navigate the minefield of compliance risks. So while this coming, a very popular thing to do, and there's a lot of folks that are very interested. There's a lot of places where, especially given the dynamic nature of what's happening [00:20:14]with tap water [0.5s] and all that, there's a lot of places where you very carefully at managing risk properly.

[00:20:19] Linda Mann So that I'm going to hand it over to the dang Eric Rumbaugh. And let me get right up here, Eric.  Amazing. All right. Awesome

[00:20:47] Eric Rumbaugh Did I heard too is dashing? That's first time in my life I was referred to as dashing in. My wife is not here to hear it!

[00:21:00] Eric Rumbaugh So, if Linda said, there's a lot of things that that balance that Linda didn't get to. And I'll just take I'll be very brief because this is not a Regnery webinar, it's a ____ webinar, top-level, top tier things to think about from really someone who's done everything here like Linda.

[00:21:22] Eric Rumbaugh But as Linda said, there are laws that apply. In a number of programs, a business of short-circuited to compliance and have created issues and legal compliance doesn't have to be scared me. But it needs to be it needs to have a seat at the table. So a couple of things I want to help within this regard.

[00:21:46] Eric Rumbaugh First. This perfect storm of conflict over worker classification. By classification, I mean, so someone as an independent talent are they really an independent talent?

[00:22:02] Eric Rumbaugh The workers want to be dependable and with technology changes, the workers to work independently has grown at the same time that the population and other market pressures have forced businesses to be more efficient and to deliver just in time. The way businesses have grown over the last couple of decades to deliver just in time to a physical. Now they're under pressure to deal Just-In-Time delivery of human capital and so someone might be able to build it. But three dollars an hour doing a particular microtask for 20, 30 hours a year with a client and would worth $15 an hour or even $30  an hour doing something that same client the rest of the year. So they can avoid paying overhead of their former employers who often roll on and build very high billing rates, which would be lower than what they might. Otherwise have been getting billed as an independent consultant.

[00:23:08] Eric Rumbaugh And it's great for everybody. Certainly, there are workers who are mistreated, who really want to be an employee and should be treated as an employee under the law. But essentially, the U.S. government did a study in 2015 where they said it was the was 40% of the US workforce is contingent, but very lengthy report was a data point.

[00:23:32] Eric Rumbaugh The highest job satisfaction with [00:23:36]Aguirre [0.0s] in the United States by far is who - independent contractors. I'll repeat what Joe Ragers and kids with other people who challenge abuses of the application and certainly there are some in the overwhelming majority of cases, Issaka application isn't abusive. In fact has the highest job satisfaction of any classification of the country. This is per US government data.

[00:24:07] Eric Rumbaugh So while there are some people who are who don't want to be, there are workers who want to be. And that's there because that's what they want to do and that's how they get the greatest affection and the greatest money. So perfect storm. We have to strive towards efficiency and we have technology making that efficiency possible for people to be independent.

[00:24:33] Eric Rumbaugh But in the words of the former U.S. Department of Labor administrator for the gig. The gig. The U.S. economy especially. Well, not especially, but including for high-level knowledge workers in the minds of him and the minds of some people, a fracturing or fissuring of the social contract, the delivery of social services, employment benefits and retirement benefits, etc.

[00:25:04] Eric Rumbaugh At times, unions don't like independent contractor classification because it kind of can't be employees. And in the big elephant in the room is the state and federal governments. Regularly, he wrote data on how much money revenue they lose because of E-classification. I overwhelmingly independent contractors pay their taxes and they pay them on time.

[00:25:30] Eric Rumbaugh I'm self-employed. I'm a partner at a law firm. I actually do a quarterly estimated payment due tomorrow. But not everybody pays their full taxes or pays them on time. The government estimates that cost them hundreds of billions of dollars per year. So, you know, forces trying to fight independent contractor classification and yet the market is pushing towards a more and more independent workforce or at least segments of the workforce being more and more independent. And so that results in is a confusing, patchwork of regulation. So point number one.

[00:26:12] Eric Rumbaugh So I'm going to count, but I've estimated that there may be over 100 and maybe even over 200 different definitions of who's an employee, different test for employee status. So if you are going to take the position that somebody is not your employee, they're an independent contractor or point one, there isn't one. It's easy for someone to be an employee under one passed.

[00:26:35] Eric Rumbaugh And being given a contract under another and the fact that someone is paid on a W-2 to them, they're an employee, it's a factor for someone who has their payments reported on it, 99 doesn't mean they're an independent contractor. It's a factor, but it's not positive.

[00:26:51] Eric Rumbaugh And an employee under one test and be an independent contractor and another for the federal tax or the economic reality test, which is the means for wage and hour purposes, the con law test, which is the main test for benefits purposes, and that's the test applied under the Affordable Care Act. The IRS has its test, which is similar but different. But these have multiple overlapping tests.

[00:27:15] Eric Rumbaugh I live in on consciousness, like all good-hearted people, and was coherent unemployment comp test as a worker's compensation test. It has [00:27:23]a witch [0.1s] claims test. It has a different test for civil rights claims, and that's typical. States have different purposes, different laws, and you can get different all else. So in several, you know, the US Department of Labor through rulemaking or through attrition or statute, but just through an administrative interpretive memo issued an interpretation of the economic realities test, which is the federal test for our purposes. And we stood wage in our law on its head.

[00:27:58] Eric Rumbaugh If you haven't read the "Why David Wild Memorandum", it was indicated last fall, but it could go on its head and took a handful of outlier cases and pronounced those as the Department of Labor's interpretation of what the law is and start a presumption that everyone is and should be an of all of their clients and everyone who touches them.

[00:28:23] Eric Rumbaugh So should you be an employee, not only is that good public policy, but you should be a co-employee of all entities if they're all touching you. That was ended. And so at the federal level, we have a new rule. We just have the old rule.

[00:28:42] Eric Rumbaugh So people who read of the While Memorandum as greenlining, I seek clarification from a federal level. That's not true. Well, the old standard, which wasn't pretty friendly and we know new standards from difficult, complicated, multiple overlapping standards.

[00:29:04] Eric Rumbaugh With the momentum we got, an outlier has opened [00:29:08]a store [0.1s] interpretation and we've gone back to the old standard, which was not Shangrila, it was livable. It wasn't a green light. We have no sign horizon that there's going to be a new standard of electrification. And in any case, I would not make business plans around. And it's going to change with different administrations, so. There's going to be a new standard. Rescission of an outlier standard, but no new standard.

[00:29:45] Eric Rumbaugh But the point here is the states have filled the field. So you have basically an old/neutral federal standard for altering theirs. Rapidly and surprisingly, in ways that make it harder to classify someone as an independent contractor of the big headline is California, not legislation, not through rulemaking, but through a Supreme Court decision.

[00:30:13] Eric Rumbaugh Adopt a new, substantially more difficult past fairy classification, which is difficult. So here if you are engaging independent contractors, is do all we're saying get the best talent, but make sure that you have a tool in place with people trained to apply the tool or make people that you're engaging are in fact, independent contract workers. That quote of state, local, and federal laws. It's not impossible to navigate. You shouldn't regard it as serious, but something you have to take pay attention to. Like it's in the law to take it away.

[00:30:52] Eric Rumbaugh There was a new U.S. Supreme Court case, the epic Thomas case, which is want to say there are 2 most important things in recent memory. One would be California adopting new hostile Trichy status from [00:31:10]Plautus. [0.0s] Almost twinned with it is the U.S. Supreme Court's epic systems decision.

[00:31:17] Eric Rumbaugh So those who are industry veterans will remember going all the way back to the late 80s, the Alexander vs. Gardner Denver case, which dealt with the arbitral ability of civil rights cases. Discrimination case. Can your situation of civil rights cases in Gardner vs. you divest EEOC federal agencies of the ability to investigate? So to the extent that you try and compel the operation if you're trying to say and EEOC can't investigate that, that's against public policy. No, was interpreted by us as being largely empty penetration, then several years later in Gilmore's interstate, Johnson Lane, in an age discrimination case, the Supreme Court said we didn't mean to hostile the Arbitration Act Civil rights cases are fully arbitral. You can find a pre-dispute arbitration agreement and under Federal Arbitration Act, that agreement is fully enforceable. And then courts don't like arbitrating employment claims and think it's unfair to the worker to force them to offer it or overturned those arguments. And after Gillmer most state laws. Linda arbitrarily were found to be preempted by federal law and was thought to be invalid, so Gillmer green lighted arbitration. Then the arbitration industry got fired for being unfair to workers and what they did is they make arbitration, have all the bells and whistles of court. So they read the criticism by making arbitration as lengthy and expensive as a court with arbitration super unattractive. So they've been practicing for as long as we have of when push nation to lobbying are not even talking about arbitration because of the way the arbitration process changed.

[00:33:18] Eric Rumbaugh Then seven years ago, the U.S. court, in a case that didn't do with employment, AT&T vs. Concepcion on. California rule that invalidated as being against public policy class waiver agreement that's so unpopular, there was an arbitration agreement that said, you can agree, but you have to arbitrate as an individual. You can't arbitrate as a group.

[00:33:42] Eric Rumbaugh You can't operate as a class. You had a rule that said class waivers are against public policy. It was called the Discover Bank Rule. The U.S. Supreme Court said the Discover bank rule is invalidated by preempted by the Federal Arbitration Act. So that's the California rule. The California rules invalid class waivers are valid. If we don't patriation I don't like arbitration, but arbitration that can have a class waiver that's enforceable is very active in its system.

[00:34:16] Eric Rumbaugh The U.S. Supreme Court got a question, does the AT&T Concepcion rule apply in our employment cases? The U.S. National Relations Board argued it would. Claspers are against public policy because employees of the National Labor Relations Act have the right statutorily to engage in protected, concerted activity. So unless it was one federal statute up against another, which is different than the California Discover bank rule.

[00:34:43] Eric Rumbaugh In a huge victory for employers, the Supreme Court epic system led arbitration with class waivers in employment. Now we're going to have rearguard anti arbitration litigation for years, but this is good of a green light as a validation for arbitration to get in. And the more I hear the message here isn't arbitration is good, you should arbitrate as some like arbitration. But arbitration, an arbitration agreement that includes an enforceable waiver of class litigation is a big deal. And if you have not considered implementing a class waiver arbitration agreement, you should do it. And if you decide not to do it, you should think about it again.

[00:35:29] Eric Rumbaugh There is a number you almost don't go a week without getting a new state law that put that impacts worker allocation pencil. Yeah, just implemented a new law that forces businesses that use contractors outside of Pennsylvania to do work, Pennsylvania to have taxes withheld in constitutional law.

[00:35:55] Eric Rumbaugh Questions here, does this discourage interstate commerce to violate the commerce clause of the Constitution? Something I have thought about since law school. If there's any lawyers in the line that would say, oh, yeah, Commerce Clause question and it's something about in con law is first year law students, then bus. Don't think of it again. If you're a constitutional law scholar or lawyer, you might think a lot. But for me, I wrote about it in 33 years, but growing up as a [00:36:26]shoo [0.0s] in employment law and then, you know, we just have a proliferation of state and local laws to discourage independent contractor classification.

[00:36:38] Eric Rumbaugh And so the takeaway here is it's inviting era, the percentage of the workforce that is large and growing. It's inevitable that it'll continue only it's inevitable that there's going to be ongoing state, local, federal, IT and legislative and judicial efforts to curb or reverse that trend. And I think that we're more than a decade that the trend will reverse. I've been wrong every time the trend continues growing. And this is not something that anyone should be afraid of, but it's something that everyone needs to be cognizant of and take seriously.

[00:37:15] Eric Rumbaugh Linda. Taught executive support for a program. The programs will need executive support for compliance. What I teach a class on here for another group and the punch line at the end of this section is always is also not a part to determine how well you're doing in terms of classification, but to find out how people into your program that didn't go through your classification can or is never to. You attract people trying to find ways to engage talent without going through the tool and see to have executive support to ensure people aren't as the tool. Otherwise, you're not going to have a good tool, but you won't be using it. That I will turn it back to Linda. Reliably, I went over my time.

[00:38:13] Linda Mann Why is it? Do we want to open it up for questions? I didn't really have the material to cover unless you want me to circle back on the.

[00:38:22] Alec Music No questions that were both.

[00:38:26] Eric Rumbaugh We're waiting for questions, I want to talk about kind of a comprehensive audit piece, so would I recommend.

 [00:38:34] Linda Mann I knew you couldn't be done?

[00:38:36] Eric Rumbaugh Well, I would recommend that businesses do in this space. This is first of all if you're engaging talent as an independent contractor, you have somebody whose job is to look at the computer for independent contractor and say, yes, you are an independent contractor or no, you're not in every business that has an office whose job it is to do that. So every large organization will have somebody whose job it is to say yay or nay, an independent contractor. If in your position you don't have somebody whose job it is or a group of people whose job it is, you need to get that one. Somebody who looks at each new independent contractor and says, yes, you're an independent contractor or no, you're not. And that vision has to be based, has to be based on the different tests that apply.

[00:39:28] Eric Rumbaugh The main federal test would be the economic realities test, the common test and the IRS and then your state tests that that vary depending on what state you're in. In some cases, you can get someone who's obviously an independent contractor in Pennsylvania and absolutely not an independent contractor in Massachusetts, and happens all the time.

[00:39:46] Eric Rumbaugh I know a lot of people were in both states need to have that office that's in place and trained to do this classification. If you don't have an office and you're not good at it, it can engage a third party and renew or do your classification. There's a lot of there's a number of businesses in this space that do this and MBO's one of them.

[00:40:10] Eric Rumbaugh And there's a popular have people to deal with these difficult poll questions system. But now they pretend that you so I said, I recommend that you audit and teach a class on this, I spent a lot of time talking about this audit.

[00:40:30] Eric Rumbaugh You think on this one you don't need to look at every everybody I know, a pollster, but pollster, statistically valid samples for elections, doing, you know, a thousand people in the whole United States. If you've got hundreds or thousands of contractors, you don't need to look at hundreds or thousands of contractors to give yourself a report card and do enough to find out how are you getting 99 percent right? Are you getting 90 percent right? How are you doing? You want that report card to you don't tell the workers that you're auditing them.

[00:41:04] Eric Rumbaugh You this sort of okay, they probably aren't you don't have an issue, but you want to tell workers, hey, we're worried about how you how we pacified you, but you want to give your report card, you want to do periodically, how are we doing and are not doing a good job. Get more training for your team. Look at your tool. Everybody's tool is based on the test. If you make 100 companies and look at their tool, they gather data to classify people. They ask questions that are paired up with the different tasks that happen in the common law test when they have gathered data. So we can see how we do it on factors of how we do on factor five and economic realities test, etc..

[00:41:45] Eric Rumbaugh So all the tools look pretty similar. But there's garbage in, garbage out. Consultants and their managers answer questions and they don't ever do one of these. [00:41:56]Klans [0.0s] knows that you get answers to questionnaires that don't necessarily make sense, and a lot of times you need to follow up queries. But my reason I said before, isn't just to give myself a report card on how we're doing.

[00:42:11] Eric Rumbaugh The biggest is find out how people got engaged without going through your classification program. You will find people who get made outside of your program in the darndest way and you find out why.

[00:42:26] Eric Rumbaugh So a lot of times the complaint will be this key manager of this key executive. Consultants didn't want to hire the contractors they want to hire or don't like going through the engagement protocol, they've taken them, they don't like answering questions about their business. Questions need to know the answers to determine if you can classify someone correctly. They answering those questions and so their sponsor, their equal interviews. And that is you have to go through this jury to go through this, just engage them. And then the gig did by the time you get around to finding out that someone got engaged outside of your system.

[00:43:05] Eric Rumbaugh What are the things it takes too long, it's too invasive, I don't like giving up this information. Your test is too difficult. You don't pass people, alive you get consultants whose lawyers and accountants will, we don't pass them. We'll call you and say, what are you talking about? I'm a lawyer. I work in the space. Joe's obviously been a contractor or I'm Joe's accountant. I'm sorry. Come on, Ali. I'm Susan, an independent contractor. And you get pushback. You know, you need to deal with the problems for your engagement to pull it so that your internal audience, your internal client is not dissatisfied.

[00:43:46] Eric Rumbaugh But all because if you had a tool and you have a process that doesn't acknowledge, recognize and deal with those problems, you will continue to have a lack of options. You will continue. If people aren't your process. With Linda for different reasons, flag right away as being her big issue is her cover to make sure your system gets used. For me, my reason for wanting to make sure that some get used is compliant.

[00:44:15] Eric Rumbaugh It's the system in the world on paper and if people aren't using it, it's a good system.

[00:44:35] Alec Music Jump into some questions there, and I'm sure. All right, a handful of folks out on the call, please continue to submit your questions if we don't get to them during the webinar, will make sure they are followed up with afterward. And we are able to stop our talent pool with contractors we've used before, but we're used to the staffing company?

[00:44:58] Linda Mann Yeah, that's a really good question. So it depends. So you know, you really have to make sure that that contractor is comfortable with this, with the agreement that they had with that staffing company. So sometimes the staffing companies will have arrangements with a talent that they can't do that right to join your marketplace. But it's a case-by-case basis. You obviously don't want to push folks to do that. They don't feel comfortable with it. And I know we're don't legally. I'm not sure if you have a perspective on this, but I know that in the past and we've done this, we've really sort of vision up to the contractor. To make sure they understand the terms of their contract with the US staffing company and to determine what is appropriate.

[00:45:47] Eric Rumbaugh So there are a couple of legal issues here. One and then some second layers and the legal issues.

[00:45:54] Eric Rumbaugh One, you may contract with your staffing there. That would. May be able to make a conversion fee. If someone came to you first through the staffing vendor, those are very common in contract to staffing that there's so you're going to engage someone on. That probably came through a staffing vendor that's legal, but may, depending on how your contract reads, you may owe a fee to engage them that way if you want. You don't like the way the fees add up, you should talk to your staffing vendor and change the fee.

[00:46:31] Eric Rumbaugh My second layer is the worker may have _______ the staffing vendor that his or her ability to come work with you. So you read your contract and track says. Whatever a conversion fee, if you're going to hire someone as an employer, independent contractor that came to the goose stepping vendor, that doesn't answer the question because the worker may have a contract act that their ability to come to work for you and they may be reaching a contract and the legal term for what you'd be doing then as you'd be torturously interfering with a contract and creating legal liability. I say if it's an ongoing staffing vendor that wants to keep your work, they'll come up with a way to solve this rather than sue you because you hired two people. But you should deal with it, not ignore.

[00:47:22] Eric Rumbaugh I also say that in a number of states and mine is one of them, the ability those contracts exist, but they're largely unenforceable to make it very difficult. It's built-in Wisconsin and Wisconsin that the only state that has this problem has an enforceable conversion fee too. IGun and the staffing suppliers in Wisconsin that know about Wisconsin law have to comply, and we could talk to you about ways to comply if you want. But the fact that you sign an agreement doesn't automatically mean it's enforceable. It's a state-by-state issue. And I would say the staffing industry has largely not paid attention to that.

[00:48:10] Eric Rumbaugh So there's a fourth layer to the union and. The U.S. is engaged with employees for you. That is whether directly or through a staffing company, that does not mean that they can't thereafter come to you, work for you as an independent contractor.

[00:48:30] Eric Rumbaugh It's perfectly plausible. To be that someone could be an employee on Monday, an independent contractor on Wednesday, however, the red flag in the audit manual that's flagged that that doesn't guarantee you get audited, but that's something that draws the audit attention. And so he suspect measure to cut it once. If you are gauging someone's been a contractor who heretofore had been a W2 consultant, either directly or through a staffing vendor. And check your tracks. If you don't like the contracts and you've got a staffing vendor you're continuing to work with, get them changed.

[00:49:17] Alec Music So much, I appreciate it. All right, we're going to go to the next question, what was supposed to be the minimum number of projects in contractors needed for programs to succeed? This is an estimate. Great. Thank you.

[00:49:32] Linda Mann Minimum projects, what is it?

[00:49:34] Alec Music A minimum number of projects they needed for a program to succeed.

[00:49:44] Linda Mann So it's all about managing expectations on the other side. You know, I think what we had typically done was set for anticipated needs. You should have roughly, you know, maybe a certain talent that could theoretically fill that role, because there's a variety of reasons when you actually need that person to work that they may not be available. First of all, at any given point in time, most of the talent has another project that they're already working on. It doesn't mean they can't leave it, but they do. And other little things may come in like geography and things like that. So I would think of it from, you know, in terms of the volume of talent, I would do it based on how much demand you're going to have in terms of a number of products. So it's not common that you'll have the talent there. And so it's just I feel like I'm down on it. But it's a hard question to answer because it depends on the scope of your focus. Right. If you have, if you're working with three managers, then there's not as many that you need.

[00:50:49] Linda Mann But then in terms of the number of projects, the balance, you're going to have to strike it as a talent and join the marketplace and work with you. If they don't see work out, there are open projects that fit their needs. They start to lose interest and they start to go stale and they don't really come around anymore. So one, I think, at least a couple I'll tell you, in the____ of  PwC that you see, well I say we launch maybe about a dozen projects. Right. And we actually had probably a few thousand talents in there. We were trying to cut across about a dozen different skills there.

[00:51:28] Linda Mann So I don't know that there is a perfect number. It's more about, I think, your ability to match the type of talent you're getting into the marketplace with the types of things you're going have of, OK, that's helpful. It's hard to give you a concrete number.

[00:51:45] Eric Rumbaugh I come at it from a different angle Linda. So there are two different critical mass issues that don't have anything to do with any law, just having to do with critical mass and practicality. If you don't have a critical mass of work orders, you're the contractor community is never going to find out about your program. You're not going to become the client of choice for the contract. There's the group place for them to work if you don't have a critical mass out there for them to look for if there's a new restaurant club or a new store for that, no traffic. And say, why are you open and the winner, shouldn't you close? The answer is no. We have to stay open so people get heads that we're here and we're open and in six months from now will be busting the teams. But if we just shut down, we're slow now. We're business going forward. It's the same thing with the program. You need to have the pump primed with a job or get traffic at the fair and that.

[00:52:51] Linda Mann So let me pause there.

[00:52:53] Linda Mann So that's the whole chicken and the egg. And I think it is ideal if you have a lot of open jobs in there to attract the talent. I think the managers are less patient than the town is. And so what to do is it's all about messaging. So as you're trying to attract the talent before you have this critical mass of open projects that will attract them, you know, you have to attract them by having recruiters and folks like that reach out the talent and invite them to join and explain to them that you're building a marketplace. Right. And setting expectations for the ramp-up of the available projects.

[00:53:31] Eric Rumbaugh I agree completely.

[00:53:42] Alec Music We will keep them through these questions and keep submitting your questions as we go through this one. If a California contractor was properly classified, but didn't pass the new test, what would you do?

[00:54:00] Eric Rumbaugh So there are two questions about that question. One yeah, comply with the new test going forward or stop the fit. You were correct under the old test. Don't you don't have to comply with the new test. So that's the easy part of the question and reclassified them. And we've talked to a lot of law firms in California and a lot of businesses in California. And everyone is answering the question that way.

[00:54:28] Eric Rumbaugh Just reclassify people as best you can go forward. Now, what are you going to be liable for? For not launching with a new test that you didn't know about yesterday, today it's going to shake out in the courts, I can't answer that question. But the question you actually asked, which is what do we do? The answer is to apply for the test and reclassify people if you get a different answer.

[00:54:56] Eric Rumbaugh I would say as far as messaging. Something about is when the five people you don't want to say they were misclassified previously. And I favor a blanket or leave it or at least thinking about it and this is not legal. This is strategic.

[00:55:18] Eric Rumbaugh A kid in California is an employee going forward. And it will apply the test to make an exception, you're an employee in California. That way for the consultants, a message that they misclassified me yesterday. So kind of a Pumar asbestos moment, the asbestos is fine as long as you leave it alone, but the moment you make the change, the asbestos, now it gets in the air and now it's a problem from hell off. Asbestos is a strategic now partly legal question, but also a strategic question. And so a lot of people are saying what a way to package it. That doesn't turn on what he did yesterday. And that's one of the things that some businesses are doing, is just reclassifying everyone, whether you think you could just buy Nike clarification of the new test or not. That actually requires some big brains, think about the first questions easily.

[00:56:26] Alec Music We want to hear more questions than what's up with at the top of the hour next? How should we publicize our success? So what's the interesting question? My first thought was so everybody and everybody, I'd love to hear your thoughts on that.

[00:56:43] Linda Mann Yeah, I think there's a couple of things. So you want to create almost a bit of a case study about it, right. Talk about the specific individuals. Talk about the specific successes, because when as powerful as this, if someone is about a success, then they can relate to it. Right. And I think you publicize it by making sure that the leadership is showing it right. And every company has its own ways of sharing these things, these types of communications.

[00:57:09] Linda Mann And you as the team driving the direct sourcing program, as you go out and talk to new managers, you hear that with them there. It's very powerful. Also, if you can have those managers join some of these calls and help recruit other managers and help sort of share their experiences that way. So I think the Carroway is when you can have that of the manager talk about it, whether it's just, you know, people that just naturally will talk to the other folks in an informal fashion, but sort of find some venues where they can formulate about it and where you can really feature them. And, you know, whether it's email communications or whatever or.

[00:57:52] Alec Music For and on a wrap-up, do you want to add a place to our career where people can fight for talent?

[00:58:02] Linda Mann So funny you ask so often working in the MBO because I will tell you, you have to keep a reason out of the distance between opportunity for full-time employees and opportunities for independent talent. Right. You don't want it to appear like you're intermingling the two. But we've actually worked on with our clients is we had MBO will actually host pay for our clients where they can, in a way, market to the talent, talk about why they are a client of choice for their talent and in turn, then links them to open opportunities at that enterprise, have a set that we host for them.

[00:58:39] Linda Mann So you want to have and the talent would discover that page a couple of ways. One could maybe go to your company page, your careers page. Right. And you can say something about, you know, artists and working independently. And there's a link and then they clearly are going somewhere different. So, no, they're not looking at full-time opportunities.

[00:58:57] Linda Mann You're looking at contract work. Right. Or you also may just be doing it right. Independent contractor or whatever. And, you know, the pages would be discoverable that way. But so you definitely have a place they can go. You just want to make sure you're managing in such a way where it's not intermingling with your career pages.

[00:59:22] Alec Music Keep those two separate. Thank you so much. That concludes today's webinar, appreciate your time. I hope everyone but the presenter loves this bit of the Future webinar. And just right now, in the next moment or two all of the Web or get back will be pushed through the Web platform that so much everyone and I hope you have a wonderful day for the rest of the day.