Service leaders are always on the lookout for talent since great service — and quality technicians — are key to keeping customers happy. But staffing can get tricky for many reasons, whether a skills gap, seasonal workload fluctuations or the loss of experienced employees to retirement.
Whatever the cause, talent management is a growing concern for service organizations. A recent survey from The Service Council found that 32 percent of respondents currently face a talent shortage, while 71 percent expect to during the next 10 years. Service leaders might look to independent contractors or technicians to mitigate staffing holes, but there are a few mistakes organizations should avoid when engaging with independent technicians.
Walk the Line: Employee or Freelancer?
Perhaps the greatest concern when hiring independent techs is ensuring they meet the company’s quality and customer service standards. But managers should understand that they may not be able to formally train independent technicians.
“There’s a fine line that you have to follow with people who are subcontracting,” says Joe Crisara, a longtime service contractor and CEO of ContractorSelling.com. Supplying external contractors with training, equipment or devices can legally turn that person into an employee in the eyes of the IRS, which can cause a tax burden for companies who blur the line between independent tech and employee.
The IRS isn’t the only concern. If a company’s insurance provider finds out, it could charge the company for workers’ compensation benefit payments. “We’ve had several contractors who have been back-charged $50,000 or more for subcontractors that didn’t have their own workman’s comp,” Crisara says.
Many companies are simply unaware of the legal issues surrounding independent contractors. And it can be even more difficult for field service organizations to toe the line. “You really need to train people how to offer the service,” Crisara says.
Other Common Mistakes
Formal training is one common pitfall, but service leaders must also be careful not to cross the line by providing cell phones, insurance, tools, equipment or other perks that a normal employee would receive.
The solution to these restrictions? Organizations should focus on the quality of the independent contractors they partner with, clearly describe the standards they are expected to uphold, put those standards in the contract — and trust them to work as professionals.
“Some of the mistakes are when you just turn the whole thing over to a subcontractor and leave them to create their own standards,” Crisara says. “That’s where companies get in trouble, because they say, ‘We have a subcontractor, let’s let him figure out the standards of workmanship and communication we require.’”
Formal training isn’t an option, nor should it be necessary. Quality independent techs aren’t necessarily cheaper than full-time employees, but they should bring experience — not to mention their own insurance, equipment and vehicles — that the company would normally cover for an employee.
Subcontractors and independent technicians can be a pragmatic, effective way to plug staffing holes, but field service organizations must be careful not to cross the line where freelancers legally become employees.