S taying compliant is much more than just properly classifying workers. Organizations must consider various internal, federal and state policies and stay informed of any changes to these policies.

Staying compliant today means staying prepared. It means organizations are better able to address challenges and provide the right information around the use of contingent labor. So…it is no surprise that when organizations are able to comply, they are also able to improve visibility, gain executive support and evaluate the results of their contingent labor.

Here is a closer look:

Improve Visibility: It is hard to talk about contingent workforce management without talking about visibility. Aberdeen research found a direct link between organizations that are compliant and organizations that have strong visibility. When organizations are diligent about compliance, they understand the “who, what, where, when, why and how” around the use of 1099s across the organization as well as the performance of 1099s. They are not only concerned with how 1099s are being classified but also, how they are contributing to overall organizational success. Also, these organizations indicated that the primary areas of the business where they are using 1099s include: IT (49%), Management Consulting (41%) and Engineering (23%).

Gain Executive Support: Having support from senior leaders makes managing a contingent workforce much easier. Senior leaders and managers are typically fearful that non-compliance will negatively impact critical projects and result in the loss of productivity. When compliance is in place, senior executives feel reassured when investing in independent contractors. The bottom line is that compliance gives senior leaders peace of mind. For this reason, 75% of organizations that ensure compliance have executive support compared to 29% of non-compliant organizations. Also, 85% of compliant organizations have corporate support compared to 26% of organizations that do not ensure compliance. What may be a surprise is the fact that these organizations are also more likely than Best-in-Class (66%) organizations to gain support of senior leaders.

Measure the Effectiveness: Organizations must be able to show that the use of contingent labor is impacting business results by measuring these efforts. Organizations that ensure compliance have a strategic advantage when measuring the effectiveness of contingent investments since they are informed and prepared for their workforce needs. As a result, 57% of these organizations have defined metrics in place compared to only 12% that do not ensure compliance and only 34% of Best-in-Class organizations. These organizations are also more likely to have a clearly defined strategy in place around their contingent workforce needs.

Staying compliant gives organizations a strategic advantage in managing their contingent labor. Not only does it allow them to stay prepared but provides the insight they need to drive business results.

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