About Debbie Fledderjohann
Recognized as the industry expert for technical, professional and healthcare contract staffing since transitioning to this growing industry in 1993. The primary focus is to help recruiters make contract placements. Top Echelon Contracting takes responsibility for all the back-office tasks associated with being the legal employer of record. Experience includes all areas of human resources, financial management, accounting, payroll, state and federal laws, legal contract reviews, benefit administration, and sales and marketing for the placement of professional contractors in 49 states. Eleven years experience as a primary vendor with the Federal Government for professional healthcare contract placements. Speaker and Trainer for industry conferences such as NAPS, CSP, and Top Echelon Network. In addition to writing for various magazines, newsletters, The Contracting Corner, and a Contracting Blog.

6 Essential Principles of Recruiting Success

Guest article by Barbara J. Bruno, CPC, CTS, CEO of Good as Gold Training, Inc. There are six essential principles that all successful staffing and recruiting firm owners have in common.     PRINCIPLE #1 – AN ENTREPRENEURIAL MINDSET How you perceive your business and your life determines your reality. Entrepreneurs embrace change and take calculated risks Owners with an entrepreneurial mindset don’t think like a “worker bee” Entrepreneurs are willing to fail to eventually win You can do your best and still experience frustration by a lack of progress or difficult periods in your business. Entrepreneurs avoid negative thinking You were not born an entrepreneur.  You build your success through constant study and tenacity. PRINCIPLE #2 – A DEFINED BRAND Your brand is the personality of your company and service, but you need to embrace what makes the express brand great.   Your brand can also accomplish the following: Enhanced performance Transparency of your company Project a sense of social responsibility Ensure business continuity during difficult times It’s up to you as the business owner to embrace and promote your brand. PRINCIPLE #3 – RICHES IN NICHES Successful business owners understand they can’t be everything to everyone.  Having a narrowly defined group of customers will help you grow and prosper. Imagine the benefits of only placing “six primary titles” where your database of candidates would match the business you write.  Other candidates surfaced or job orders out of your niche can be filled through your partners in the Top Echelon Network.  PRINCIPLE #4 – OUTSTANDING CUSTOMER SERVICE Successful entrepreneurs understand that excellent customer service will keep customers coming back. In this age of Social Media, outstanding customer service is more important than ever. How you handle clients and candidates directly affects your company’s performance.  Proper utilization of Big Biller can track the value of each customer to your business.  Tools like auto responders can ensure a strong follow-up and touch program. PRINCIPLE #5 – GOOD BANKING RELATIONSHIPS AND FISCAL DISCIPLINE It is advisable to build relationships at two banks separating your personal from your business assets.  It is wise to nurture relationships with the bank manager and head teller. Successful business owners utilize budgets and realistic sales projections to run their business.  They understand how to use a line of credit and use it for short-term cash needs, not long-term funding needs like marketing expenses. Also, if you place contractors and handle the payroll and funding yourself, you may want to consider outsourcing that liability and responsibility to Top Echelon Contracting. This would significantly reduce your line of credit and funding needs. PRINCIPLE #6 – EMBRACE TRAINING AND PROFESSIONAL ADVISORS Successful business owners realize retention of top performers is enhanced by providing consistent training.  A conversation with the right trainer or advisor can be more valuable than years of formal education. Develop relationships with other entrepreneurs who can provide insight and guidance into running a successful business.  Surround yourself with people more successful and knowledgeable than yourself.  If possible, join a Mastermind Group that can provide insight and advice.   Implement these six principles and you will enjoy higher level of sales and better [...read more...]

5 Common Recruiter Questions about Contracting

As a contract staffing back-office service, we get calls every day from recruiters who want to add contract staffing services to their business model. For other recruiters who may be interested in contract staffing, here are the “Top 5” questions we receive and our answers to them:  How do I get started in contracting? This definitely our top question. The most difficult part of getting started is handling the initial set-up and ongoing employment of the contractors. If you outsource this part to a third-party back-office service, you are only left with the front-office recruiting tasks. This means your biggest job is just spreading the word about your new service. Statistics show that 80% of contract job orders come from a recruiter’s current client base, so start by notifying all your direct hire clients that you now offer contract staffing. Also, ask current candidates if they are willing to work on contract. This will help you build a pool of contract candidates. Finally, make sure your existing marketing vehicles (website, social media profiles, business cards, marketing documents, etc.) contain your contract staffing message. How do I figure out the bill rate and pay rate? Negotiating rates can seem daunting, but it’s not as hard as it sounds. First, note that most contractors are paid on an hourly basis, so the bill rate charged to the client and the contractor pay rate will both be hourly. We recommend obtaining a range of bill rates the client would be willing to pay up front so that you can negotiate with confidence. Then, you will need to determine the contractor pay rate. Start by taking the annual salary for a comparable direct hire position and dividing it by 2,080 (the average number of full-time hours per year). You can then multiply that pay rate by a markup to get the hourly bill rate. The average markup for professional, technical, and healthcare nationwide is currently 1.63, but that can vary based on industry, location, demand for the position, and other factors. The spread between the bill rate and the pay rate covers taxes, unemployment, Workers’ Compensation, professional liability, administrative costs, and your recruiter profit. Still confused? Don’t worry. A quality back-office provider will help you through it. For instance, by asking some simple questions, Top Echelon Contracting, Inc. can generate a recruiter “Quote” that includes a matrix to help you negotiate the bill rate and pay rate. It covers a $20 bill rate spread and $11 pay rate spread, so if the client or contractor try to negotiate a different rate, you can see how that will impact your recruiter profit (which is also hourly). What if a client doesn’t pay the invoice for hours already paid to the contractor? If you run your own back-office, this is one of the biggest risks you take on. Collecting on unpaid invoices will be your responsibility, and if they prove uncollectible, you will have to take the loss. If you are outsourcing, be sure to ask the back-office about their collection practices.  Some service providers involve the recruiter in the process and may hold you responsible for all or a portion of unpaid invoices. This is one area where it pays to do your homework when selecting a back-office – in this case, it all comes down to the money. Do I have to sign a contract with a back-office? That depends on which back-office you select. This should be one of the main questions you ask, because a contract could tie you into using their services exclusively or for a certain length of time. You could also be opening yourself up to potential co-employment liability, depending on how the terms are phrased. You need to be very certain which entity is functioning as the legal W-2 employer of record for your contractors. How should I explain why I have outsourced the back-office? Simply tell your client that you have outsourced the administrative tasks so you can focus on the recruiting aspects of the placement. Depending on the back-office, they will become the contractors’ legal W-2 employer, handling payroll, legal compliance, Workers’ Compensation, unemployment insurance, and all the employment tasks, and giving the contractor access to group benefits that you could not provide on your own. Most importantly, assure your client that YOU will still be their main [...read more...]

Should You Hire a Recruiter to Focus on Contract Staffing?

There is no doubt that contract staffing is continuing to increase in almost all technical and professional sectors. As a reminder, the top five industries for contract staffing in 2014 were:     IT (consistently a strong field) Engineering/Manufacturing Healthcare (degreed professionals) Accounting and Finance Business Professionals Are you considering adding contract staffing to your business model? If so, you have probably wondered if you should hire new staff to work solely on contracting. There are essentially two pieces of a contract staffing business: 1) The FRONT-OFFICE job order and candidate recruiting tasks 2) The BACK-OFFICE administrative, legal and financial requirements The good news? You don’t have to hire someone  to handle the back-office tasks if you outsource them to a full service back-office provider. Additionally, the ramp-up time is significantly less if you outsource the back-office. You can place a contractor in a matter of hours instead of the months it would take to establish your own Workers’ Compensation, payroll funding, legal contracts, payroll processing, taxes, insurance, etc. Even MORE good news…  Since 1992, we have worked with recruiting firms who have added contract staffing to their business model without hiring any additional recruiting staff. We have also worked with firms who have decided to add a recruiter who focuses exclusively on contract placements. In the end, there is no right or wrong answer. It comes down to your firm’s unique requirements and aims. Let’s consider the pros and cons of both avenues.  Using Existing Staff/Recruiters The biggest “pro” of utilizing your existing staff (or doing it yourself if you are a one-man show) is keeping your overhead low. Moreover, our statistics show that 80% of a firm’s contract staffing business comes from their existing direct hire clients. Many firms and clients already have a strong working relationship entailing a great deal of trust, so it is easy to transfer that relationship to contract staffing. The potential con here lies in the learning curve. Thankfully, it isn’t that steep. For recruiters new to contract staffing, learning how to set the rates is a common challenge, but it is not nearly as complicated as it looks. If you are working with a contract staffing back-office, they can lead you through the entire process to make certain you are quoting fair and reasonable rates with the maximum amount of recruiter profit. Hiring Contract Staffing Recruiters The “pro” in this situation is that the recruiting firm can hire someone who already has experience with contract staffing. That way, the recruiter hits the ground running with little to no training. If you are looking to aggressively build the contract staffing side of your business, it is also helpful to have someone who is completely focused on contract job orders. Of course, unlike your current team, this new recruiter won’t have an established relationship with your clients. This could initially be a stumbling block, and your clients may not like having to work with different recruiters for direct hire and contract. What’s Best for YOUR Firm? Again, there is no definitive right way. We have seen great success using both approaches. And in some cases, a recruiter has started doing contract staffing with existing staff and it became so successful that he/she had to hire additional recruiters to handle the large volume of contract job orders.  It ultimately comes down to what is best for your firm. Perhaps statistics will also factor into your decision. We analyzed the data of recruiters making contract placements with our back-office: Only 11% hired additional staff, while the other 89% started offering contracting by doing it themselves or using their existing staff. Rest assured that no matter which choice you make, you have already increased the value of your firm simply by adding contract [...read more...]

The Hidden Costs of Obamacare

As a professional in the business world, you are likely aware that the Affordable Care Act (ACA, also referred to as Obamacare) is not without costs, but some are more apparent than others. Among the obvious requirements, individuals must purchase health insurance or pay a penalty for non-compliance, unless they are exempt. Additionally, employers that are subject to the law must offer health insurance to employees and their dependents or be faced with a penalty. One of the hidden costs of Obamacare is the administrative drain. The tracking and paperwork burden that has fallen to businesses can cost thousands of dollars and countless hours of productivity. Small businesses have been hit particularly hard, as they were typically operating on a tight margin even before the new law became effective. Now, they are drowning in the paperwork that is required to track workers’ hours, the business’ liability for health insurance premiums, and the resulting cost calculations. Those that choose to outsource the new administrative burden to human resources providers and payroll services save on time, but still have to pay for those extra services. According to a survey by the National Small Business Association, ACA compliance costs small businesses $15,000 per year on average. While painful for the businesses that have to comply, these new burdens present opportunities for recruiters. One way or another, compliance requires hiring. Some companies will add additional HR or payroll personnel to their core staff, and other companies may simply hire contractors to handle their paperwork [...read more...]

Are You Protecting Yourself from Negligent Hiring Claims?

Do you run background checks when placing individuals in direct hire or contract positions? If not, you should highly consider it. Negligent hiring claims are made when there is something in the individual’s history that could have predicted the offense in question. Commonly, negligent hiring lawsuits emerge because of one oversight – neglecting to do background checks. Having a background screening program is vital to help mitigate risk and protect your business from litigation and adverse publicity. It’s in your best interest to conduct a background check on your candidates after an offer has been extended. Top Echelon Contracting, Inc. (TEC) runs background checks on all its contractors through background screening vendor IntelliCorp.  As a benefit of our national contract with them, customers we refer to IntelliCorp through our preferred vendor program can get discounted rates on a variety of services, including validated criminal searches, SSN verification, employment and education verifications, motor vehicle reports, drug testing, credit reports, professional license verifications, and I9 and E-Verify services.         Discount Offer IntelliCorp is accredited through the National Association of Professional Background Screeners (NAPBS), and provides cost-effective screening packages and easy-to-use services. Through the preferred vendor referral program, you will enjoy the following benefits: Preferred pricing System & product training sessions Compliance information/online sample forms Personalized customer support Criminal product validation Secure online report ordering & retrieval To take advantage of this preferred pricing, go to the Preferred Vendors page of our website: https://www.topecheloncontracting.com/about/preferred-vendors/ For more information, call IntelliCorp at (800) 539-3717, ext. [...read more...]

Should You Ignore Job Hoppers?

(Original post date 9/6/11, updated 3/11/15) For many recruiters, the knee-jerk reaction to the question of whether or not job hoppers should be overlooked is a resounding “Yes!” After all, your clients don’t want to pay you good money to place a candidate, only to have to do it all over again in a few months. But you might want to think twice before uniformly rejecting resumes that show a pattern of frequent job switching. As De Lara mentions in her article, “In Defense of Recruiting the Job Hopper,”  relying too heavily on a candidate’s resume dates to determine whether they are qualified for a position is often a big mistake. Job hopping can actually be the sign of a high performer who thrives on challenge and is easily bored. Although these workers may not stay for a long period of time, their potential contribution could be bigger than that of a long-tenured employee who is “boxed in a comfort zone.” Rather than simply passing them over based on their resume timelines, consider giving them a chance to explain their job-hopping ways. Times have changed. As one recruiter pointed out, “The reality [is] that with this and previous recessions, and with this slowest of all time recovery, really good people are under-employed or holding on to leaky lifeboat positions for survival.” People have had to do whatever it takes to get through the recession, including switching jobs frequently. For this reason and others, you are going to find fewer and fewer people who have spent long portions of their career with one company. Still, it’s understandable that you might shy away from job-hopping candidates for your direct placements. They are, however, perfect contract candidates for the following reasons: Contract assignments will give them the constant challenge they crave. They are quick learners who are undaunted by new, demanding situations. They can make an immediate impact by working on critical deadlines and projects. They can pad their resumes with a wealth of knowledge, skills, and references. They may be able to bring a competitive advantage to the table that another candidate could not provide. So before you overlook a candidate for switching jobs too many times, consider how this perceived weakness could actually be an asset for your [...read more...]

When to Walk Away – and When to Run

Guest article by Barbara J. Bruno, CPC, CTS, CEO of Good as Gold Training, Inc. You are not paid on efforts, you are paid on results.  Learn to identify the signs that reveal you are in a one-sided relationship.  You can’t afford to spend your valuable time on clients who do not positively impact your income. When to Walk Away From an Existing Client The clients you select to represent can make or break your success.  When you work with candidates it is often a one-time experience.  Interaction with clients should be a long-term relationship with multiple contacts over time. If you have a negative client you must determine if you can deal with their negativity without it impacting you or your sales with this client.  Learn to manage negativity and channel it into conscious results-oriented action. Review the total dollar value of the relationship. Review how much business you conduct with this client annually.  Then determine what percentage of your total production and income is derived from this client.  You may need to continue working with this client, until you land additional business to replace your lost production. Review how much time you dedicate to this client vs. return. If a client is consuming 50% of your time, but only represents 15% of your production, you may need to walk away.  Often, negative clients are the ones who try to monopolize your time and energy.  Determine the ROI of your time and energy. Focus your time where you experience the greatest return on your investment of time and energy.  It’s not easy to replace a long-term relationship, but often it is in your best interest to do just that. Where You Should Focus It is important that you represent clients that are the desired companies of candidates in your niche.  Conduct revenue modeling to determine if these prospective clients also represent your best business. People work with people they like, so it is more important for clients to like you vs. you liking them.  If you don’t like a prospect that does not mean you walk away if they can positively impact your income. Clients should value the importance of the following: Hiring authority is willing to provide you with details You have a clear understanding of the opportunity There is a sense of urgency You understand the problem that exists and can offer solutions like direct hire, contract-to-hire, and contract placements Interview process is reasonable Client communicates Salary/pay rate is commensurate with the experience required You have established rapport with your client It is important to continue to upgrade the clients you represent.  Your best client this year could be someone you have not yet called.  Follow the advice in this session and you will know when to walk away – and when to [...read more...]

IT Contracting Predicted to Outpace Direct Hire in 2015

Now is a great time to be working in the Information Technology (IT) sector. According to CareerBuilder’s recent IT forecast, “More than half of IT employers plan to add full-time, permanent staff this year…in addition, 59% of IT employers will add temporary or contract workers.” The survey also found that employers are having difficulty finding candidates with the skills they need, and as a result, they are focusing on enticing talent in various ways. What does all this mean for you, the recruiter? Your services are in demand on both sides. Clients need a good recruiter to match the job openings they have with the skilled candidates they need and can’t find. In-demand candidates need a good recruiter to cherry-pick the most enticing opportunities and present their skills to the client. And according to the above statistic, one of the best ways to position yourself for recruiting success in 2015 is to recruit contract workers. The question is – where can you find the skilled candidates employers need? The type of candidates IT employers are looking to entice also tend to be with those who would benefit most from working on contract. In addition to your standard recruiting practices, below are two strong demographics to pursue for contract work: College Graduates. It may seem counter-intuitive that 70% of IT employers want to hire inexperienced college grads when they are currently experiencing a skills gap. However, these new graduates also bring fresh talent and cutting-edge training into the workplace. Even better, recent grads overwhelmingly belong to the Millennial generation, well known for being independent digital natives with nomadic tendencies – traits which make them perfect picks for contract IT work. Retirees. We’ve already written about the “retiree restaffing” trend gaining ground this year, and the benefits to both employer and employee still apply. In this case, over half of IT employers surveyed will likely bring on retirees this year. They may not have the cutting-edge training of the new college grads, but they have an unmatched level of experience that employers need equally. Setting yourself up as a valuable resource for IT employers and candidates alike is a smart move for 2015. Make sure you’re able to provide all the services they need, from contract staffing to direct hire [...read more...]

8 VITAL Paid Sick Leave Issues to Understand

When it comes to paid sick leave (PSL), it doesn’t matter whether you run contractors through your own back-office or outsource to a back-office service provider – you need to be familiar with this employment law area.  However, unless you place contractors in a geographical area that currently requires PSL or has it on an upcoming ballot, the lack of any PSL laws at the federal level may have left you unaware of this growing issue. This is one case where ignorance is not bliss – since we first reported on this issue in April 2013, the number of cities and states requiring PSL has more than tripled and 21 states are considering statewide legislation. If PSL does not currently impact you, the odds are good that it will soon. If you run your own back-office (particularly if you place contractors in more than one location in the U.S.), the considerations are numerous and complex. Below, we list 8 of the pressing issues to consider: Staying Informed. Keeping abreast of the new locations mandating PSL is easier said than done. Since the requirements are typically enacted at the state or municipal level, finding a single source for updates is unlikely. New legislation is popping up in a piecemeal fashion around the country, so you must be proactive about researching and alerting yourself to new bills on ballots, whether they pass or fail, and the specific compliance requirements that take effect if they do pass. Does it Apply to You? Not all sick time laws affect every employer within the location equally. Some requirements, including whether or not an employer is liable, whether or not the leave time must be paid, and how much time must be provided, vary based on the size and industry of the employer. Differing Regulations. Every location handles paid sick leave differently, and keeping track of the variances can place a large administrative burden on you. Some of the regulations that can vary widely are the effective accrual date, the rate of accrual, the maximum accrual, the maximum usage, the end-of-year carryover, and the rehire provisions and policies. One Law Trumps Another. In some cases, a location may be affected by PSL laws at both the state and local level. For example, San Francisco, CA has a city-specific PSL law, but it is also covered by the California statewide PSL law. The San Francisco ordinance is more generous with respect to the amount of sick time allowed in a year, but the California law is richer in regards to the rehire provision. In this situation, the employer must provide whichever provision or benefit is more generous to the employee. Posting Requirements. Each location with a PSL law requires you, as the employer of record, to post a notification to the employee informing them of their PSL entitlements. Further complicating the issue, some locations provide model notices for employers to use, but in most cases the employer must create their own. Recordkeeping. You will have to track accruals closely and provide employees access to updated records indicating what they have earned and may use. The recordkeeping and retention requirements may vary a great deal from law to law. Rehire Provisions. The guidelines for rehire provisions vary, but they generally state that if an employee is rehired within a certain number of months, the employer must restore any accrued and unused paid sick leave. Again, this reinstatement is not client-specific – it is ­location-specific. Therefore, you may have an employee who ends a contract with one client and begins another with a different client in the same location, necessitating that you (the employer of record) observe the applicable rehire requirements. Handling the Cost. The most common PSL accrual rate is one hour of leave for every 30 hours worked. You must consider how you will handle this added cost. Will your firm account for it up front within your own back-office pricing structure? Will you invoice the cost back to the client? As you can see, PSL is not a clear or easy area of employment law, and this article offers only a brief overview of some of the vital considerations. PSL is likely to become even more complex as time goes on. For example, the issue of potential PSL rehire provision reciprocity between locations has yet to be addressed. Even if a nationwide mandate is someday put into place, it may not simplify things for employers if they are still required to provide the more generous provision or benefit of all applicable PSL laws. If all of this sounds like too much to track and implement within your own office, your best bet may be outsourcing to a back-office service provider. Make sure you carefully select a provider that will put the necessary effort into ongoing tracking and observation of the changes in law – you want to be sure that they will take the burden off of you [...read more...]

Q & A : What Staffing Option Can Help Me to Retain Clients?

In today’s complex employment and economic environment, a direct hire does not always meet a client’s needs. Offering a broad spectrum of staffing services that meets ALL your clients’ needs is vital to retain clients over time and continue acquiring new business. Fortunately, simply adding contract staffing to your business model – by taking on the responsibilities and liability yourself or outsourcing to a contract staffing back-office service – can help you do that with six commonly recognized types of contract placements: Traditional contract staffing. From a recruiting perspective, this is much like a direct hire situation: the recruiter gets the contract job order, locates the candidate, and negotiates the rates. The difference is that the contractor becomes the W-2 employee of the recruitment firm or a back-office rather than that of the client company, but the client still gains the valuable skill and expertise of the contractor.  This is extremely common when a client has a large project or a critical deadline.  The client only pays for the actual hours worked by the contractor; they are not responsible for unemployment, worker’s compensation, benefits, COBRA, or any of the other cost and liability aspects of having employees. Temp-to-direct hire conversion. The recruiter finds the candidate as with traditional contract staffing; however, here the intention is to convert the candidate to a direct hire after 6-12 months if they meet the necessary goals and expectations during the contract period.  Basically, this gives the client the opportunity to work hand-in-hand with the candidate before making the long-term commitment of hiring them directly.  This is also referred to as “try-before-you-buy.” Payrolling for non-recruited candidates. In this scenario, the client has a short-term need (3-12 months) for which they have already located their own candidate. They simply want to outsource the employer responsibility for unemployment, worker’s compensation, benefits, COBRA, and all of the other cost and liability aspects of having employees. Retiree re-staffing. Companies retain or gain the skills and experience of a retired worker by bringing them on as a contract worker.  By utilizing a staffing firm/back-office service, the client refrains from impacting pension plans because the legal employment of the worker is outsourced to a third party. Additionally, the retiree enjoys flexibility, supplemental income, and the opportunity to remain active in the workforce. 1099 independent contractor to W-2 employee conversions. Government agencies are cracking down on companies that misclassify W-2 employees as 1099 independent contractors (ICs), and the consequences include lengthy audits, hefty fines and potential back wages. Clients can avoid the risk of misclassification by converting ICs to W-2 employees and outsourcing the employment liability. Internships/co-ops. Outsourcing intern employment helps clients avoid the cost and administrative issues associated with short periods of employment. This is a viable alternative to unpaid internships which, like 1099 independent contractors, have come under fire and can only be legal if they meet a strict set of [...read more...]