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Page 2 of 2 Keeps Workers' Compensation Exposure Down In today's economic climate, one catastrophic incident can put a contractor out of business. So, many construction businesses take advantage of the fact that many staffing firms cover their employees on their workers' compensation insurance. By minimizing the number of full-time employees on payroll, contractors are also minimizing their workers' compensation risk. Minimizes Unemployment Taxes Businesses of all kinds are being forced to share in the burden of replenishing state unemployment coffers emptied because of the volume of individuals on unemployment and the extension of benefits afforded to the unemployed. Using contract labor for short-term projects can save contractors tens of thousands of dollars over the years. Contractors should consult with their accountants for State Unemployment Tax Act (SUTA) guidelines and calculations. Reduces HR and Administrative Costs Even with the surplus of quality craftsmen in the marketplace, the cost to advertise, references checks, interview, skills tests and so on, can be substantial. And the more people on a contractor's payroll, the more payroll administrative costs a business will incur. Partnering with a reputable staffing service that has a construction trade concentration enables contractors to efficiently access the talent they require while not increasing associated human resource costs. Minimizes Benefit-Oriented Costs Health care costs have seen annual double digit increases for the last decade, and employers are being asked to bear more and more of these costs for their employees. There is even new health care legislation underway that will require contractors to offer specific types and levels of benefits, which could impact construction businesses of all sizes. By using contract labor, thereby maintaining a reduced number of permanent employees, a contractor will be less impacted by such costs and regulatory mandates. "The recession, while riddled with challenges and heartache for all involved in our industry, has put construction business owners in the unique position to take total control over their labor and labor-related costs," said Bowker. "Tradesmen's business is actually on the upswing working with more and more contractors who clearly understand that their smaller workforces are more 'right-sized' than 'down-sized,' and that supplementing their core workers with high-caliber contract labor can realistically put them in a position to achieve unprecedented profit growth as the economy rebounds." Sources: 1. McGraw-Hill Construction Outlook 2010 2. Associated General Contractors of America Construction Business Owner, March 2010 Ed Rojeck is the director of marketing for Tradesmen International, a construction staffing company. Tags: 2010 March Issue , construction business , people management
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