Judy Collins | July 25, 2022

While maybe not as sexy as a big direct hire placement fee, a nice stream of income can be built up using temp and contract placements. As you are working to make your direct placements you will likely encounter applications suitable for temp and contract personnel. So, with minimal extra effort you can monetize those encounters and generate an income stream that lasts as long as the temp or contract assignment, some of which may go on for years! You need not be put off by the minutiae of temp and contract placements either, since you can easily partner with a back-office provider who will handle the details for you. You make the placement and begin to collect revenue.

You can get an idea of what sort of earnings you can expect by considering some examples. Take the case of contract employees working various assignment durations at a range of payrates and bill rates. For our purposes we have used a back-office fee of 23% of the payrate, a rate representative of the industry. As you can readily see, building your contract business can quickly add up to a respectable increase to your income.

ALICE$20/HR$30/HR$5.40/HR2 MO$864$1728
TYRONE$50/HR$80/HR$18.50/HR4 MO$2960$11840
MARY$60/HR$80/HR$6.20/HR6 MO$992$5952
COLLEEN$80/HR$130/HR$31.60/HR9 MO$5056$45504
WALLY$100/HR$150/HR$27.00/HR12 MO$4320$51840

And don’t be concerned about the contract worker converBuilding your book of contract placementsworkers
workers alook forward to.As an example
t asituadoing your income e Speed will remain a major factor: who can present the best talent in the shortest time. Concentrate on what you do best by placing the best. Partner with an Employer-of-Record service and back-office provider to free up your most valuable asset – your time!
Back-office services are necessary but do not make you money. If they are not handled properly, it can cost you money – a lot of money – fighting the IRS, the Department of Labor, unemployment, and workers’ comp claims. Establish a relationship with a back-office provider that will have your best interest at heart. It should not cost anything to get set up. There should be no obligation. There should be no minimums on payrate or length of service. You should be able to use them only when you need them.
A back-office provider can help facilitate your contract, temp, or temp-to-hire placements. An Employer of Record service and back office provider can help save you time by:

  • Onboarding your new employees with the correct and current paperwork
  • Performing any required pre-employment drug screens and background checks, and
  • Collecting the federally mandated I-9 paperwork.

You will not have to provide electronic timesheets, fund weekly payroll, send invoices or call on collections.
The back-office provider will be responsible for withholding taxes, child support payments, state and federal unemployment, matching employer taxes, wage garnishments, making payroll tax deposits and issuing the time-consuming annual W-2’s.
The Employer-of-Record will cover the workers’ comp and will provide you with a certificate of insurance covering anyone working under their umbrella. This will protect your inhouse rating.
Employer-of-Record services can provide benefit packages, including health care, which would be ACA compliant. They can also offer 401K, dental and vision plans, especially for longer-term assignments. Some assignments can last a year or longer.
Your back-office provider partner should be set up to be the Employer-of-Record in at least the US market, making it possible for you to facilitate a placement in any state that your client has a need. Use your Employer-of-Record service in states that you are not set up to be the employer in. Your clients can depend on you and not have to start a relationship with a competitor for out-of-state business.
Get this part of your business set up now to take advantage when the time is right. Your focus should be on efficiency so that you can eliminate any time and energy spent on tasks that do not require your direct attention and are not your primary focus.
Keep focused on what you do best! Recruit the best! Be the best business partner for your clients. Your clients will be happy, and so will you if you POSITION FOR EFFICIENCY.

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