Why you need to hire an independent contractor
The current economic climate has caused all of America to make a shift in their work behaviors. Those who have been hit by the wrath have taken on different shifts, taken a different career path in a recession-proof industry, scaled back on their hours worked, and even taken on temporary and full-time contract work to get by.
As an employer or employee, there are a few vital things one should know when entering into and managing a contractor position within any industry. Sharon Griggs is currently an independent contractor Executive Coach who also has experience hiring on a staff of contractors when she worked for AirTouch/Verizon.
WORKING WITH AIRTOUCH/VERIZON
Sharon Griggs worked at AirTouch/Verizon Wireless from 1984-2001 in which she held two titles: Director of International Marketing/Business Development/Strategic Planning and General Manager for Paging Operations. She worked to win licenses from across the globe for wireless telecommunications right as the competition started booming.
In order to support her marketing team, she hired local independent contractors and consultants for their expertise in the country and to complement the expertise of those already in her team. “We needed their local expertise and extra assistance when our staff became shorthanded,” Griggs says. “Our team all had MBA’s from schools like Harvard and Wharton but we needed consultants who could bring more to the table, especially in the Asian market.”
“We usually went to big consulting firms to see who they had and who could join us for a few weeks or months, based on the assignment,” she says. “We always looked for someone with comparable values of our existing staff and someone who shared our mission vision and values before bringing them on board.”
ADVICE TO THOSE DOING THE HIRING
Griggs also offers her own advice to executives looking to hire an independent contractor for their company. “When you create a contract, make sure you have an escape clause for yourself, include milestones for what they should achieve, and agree upon how and how frequently you’ll be communicating during the engagement.” She also says that as an executive managing the contractor relationship, you must clearly describe the deliverables and make your expectations very clear.
“When you hire a contractor on to conduct a certain analysis, make sure that you explain your needs and that you want to know specifics like the organizational structure, revenues, market shares, and others,” she says. And for contractors, they should also ask for a clear understanding of the deliverables and how their time is going to be accounted for – what is billable and what is not. “For instance, you should ask: ‘Is my travel time billable at the same rate as my core services?’ Have an agreement at the beginning of the relationships so you can ensure success for both sides,” Griggs says.
As far as taking into account the company’s bottom line: “You never just want to look at the raw cost of hiring an independent contractor,” she says. “When you hire the right one, the financial impact may be much larger, but also well worth it. In the long run, it could end up saving money and you’ll receive a tremendous return on investment when hiring on an expensive contractor.”
COMING FULL CIRCLE
Today, Griggs is an Executive Coach for many different companies around the world. She helps organization solve business problems and how to achieve their necessary results by developing the individual’s competencies.
Since Griggs has experiences both sides of the independent contractor and employer relationship, she highly recommends businesses take advantage of the benefits of hiring on temporary positions in the form of contractors.
“For example, if a company knows they need to bring on a person to keep the CFO position, sometimes business owners don’t really understand what that position entails,” Griggs says. “Business owners shouldn’t hesitate to hire an independent contractor to sit temporarily in that position, because ultimately they’ll come to find out what is required out of that person and what responsibilities are needed. Feel free to put a guinea pig in there to use them and further define the needs of your business and that position.”
“The more you can give that person a scope of the big picture without breaking confidentialities, the better they’ll work for out for you and your company,” she says. “Look for those contractors with subject-matter expertise, a contractor with a narrow niche.
For more information about Sharon Griggs, visit www.delmarcenter.com
Independent Contractor Classifications
Scott Callen, senior counsel in Foley & Lardner’s Labor & Employment Practice, provides a basic primer on independent contractor classification:
• Unlike most employment relationships, independent contractors are not typically hired to continuously perform services for an indefinite period of time.
• Independent contractors have significant freedom or “control” to determine what materials and equipment are used during the project as well as the methods and techniques used to achieve the final work product.
• Independent contractors usually supply their own materials, pay for many, if not all, of their own expenses, and are not typically trained by the company.
• Independent contractors have freedom to work for other customers or employers during and after the project. Alternatively, employees usually work for one employer and may have restrictions on their employment opportunities with other companies during and after the employment relationship.
• Independent contractors usually have a formal, written agreement in place describing the independent contractor relationship, setting a price/fee for the final product and the terms of the project. Alternatively, employees oftentimes are employed “at will” and are governed by company policies and procedures setting forth the terms and conditions of employment.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.