In quickly changing times, a continuous upgrading of products and services is often the key to survival. There are numerous examples of companies that failed to heed the law of nature — adapt or perish — and expired. We all can cite examples of businesses that didn’t stay ahead of the curve and are no longer with us, or have fallen so far behind the competition they are no longer relevant.
Chances are your competition is at this moment reinventing and retooling to get ahead of you. It doesn’t matter what you do — make high tech equipment, operate in the health care industry, or sell financial products — your company must continually aspire for leadership.
Of course, your in-house staff knows how to do what you do today really well. However, when significant change is necessary you must find those with fresh ideas and new ways of doing things. In most cases, businesses look outside for sources of innovation and reinvention. External experts can help you develop a new product or service, or establish new processes. In short, they can help save your business.
However, really creative workers often don’t do well in an established business environment for the long term. They want to continually take on new challenges. They are not looking to be permanent employees. That is why most businesses know the best solution is to engage these experts for a specific project, have them provide the fresh expertise needed, and then let them move on when the project is completed.
It can be an ideal solution, if you go about things correctly. Problems typically arise when you don’t have in-house expertise to manage the contingent workers. Your system should:
- Cost effectively onboard contingent workers
- Properly classify them
- Properly manage them during the project
- Properly document the engagement as it progresses
- Properly let them go
Mistakes in any of these areas can create huge legal battles and unplanned liabilities; including civil lawsuits, tax audits and violations under the Fair Labor Standards Act. This is especially true today when the government is looking for additional revenue. The misclassified worker has been identified by federal and state agencies as a rich source of tax assessments, including penalties and interest.
Bottom Line: When bringing in consultants, be sure you are protected. Follow the advice of a qualified expert and do it right.
Disclaimer: Given the general nature and context of this article, the material presented should not be relied upon or construed as either tax or legal advice. For specific information on recent developments, the effects of particular factual situations or of a particular law in regards to your business, or before making decisions based upon this presentation, you should obtain the opinion of a qualified expert.