8 reasons you shouldn’t go without an IC management solution

Although independent contractors (ICs) currently comprise up to 20% of the total workforce, many companies lack the resources they need to adequately engage and manage those contractors. That is because most companies are not familiar with how to properly – and legally – engage in a legally defensible manner with ICs, and often time mistakenly utilize a Human Resources Information Systems (HRIS) that is not designed to accommodate ICs. If contingent workers make up a portion of your workforce, one of the best business decisions you can make is to invest in a solution customized to the intricacies of the client-contractor relationship.

What is an independent contractor management solution?

An IC management solution is a software platform designed to manage the workflow of contracting, which ranges from procuring and onboarding contractors to coming to terms on the scope of the work, capturing negotiations, tracking time, settling payments and more. The benefits of utilizing such a solution—especially a dynamic, cloud-based platform like Openforce—are varied and numerous. The following eight considerations represent just a few of the benefits you will gain from leveraging an IC management solution.

1. Compliant screening and onboarding

IC screening and onboarding processes are critical, as governing bodies in every industry often cite a lack of due diligence when onboarding contractors, who should go through stringent pre-screening passes in order to provide services on behalf of an organization. This can also ensure all appropriate documentation is properly stored and easily accessible, in case of a misclassification audit.

The right platform can automate the contractor screening process and store that documentation centrally, so it is available wherever and whenever you need it. From criminal background screenings to motor vehicle records, just about any pre-qualification steps can be built into the system to streamline the process, ensuring you onboard the right contractors efficiently. Plus, a platform like Openforce allows for streamlined rate negotiation, system enrollment and document management.

2. Streamlined verification of credentials

As part of the onboarding process, IC credentials need to be verified to safeguard your investment and ensure the best possible outcomes. This includes verification of Social Security Numbers or Tax Identification Numbers, insurance and any licenses or certifications required to provide services.

The best IC management solutions can fully automate this process, prompting the contractor to provide the information and authorization necessary, user friendly platform, and then sending that data to a third-party screener, making compliance and due diligence effortless for both parties.

3. Ongoing relationship management

One of the most difficult components of a defensible IC model is the lack of information and direct control that is perceived as necessary for ongoing relationship management, such as contractor progress toward milestones and daily communication needs.

But good management systems provide solutions to conveniently send communications to ICs. Additionally, e-signature and audit trail capabilities make it easier to sign off on invoices before you initiate payment.

4. Simplified settlement processing

While paying ICs is often seen as simple in comparison to paying employees if they are housed in your employee payroll system, that is a significant bad fact from a misclassification perspective, so it is best to remove them. Removing them does solve one issue, but creates another, as it can quickly become burdensome and disorganized without a contractor settlement solution in place, especially when dealing with dozens or hundreds of ICs.

Openforce alleviates the administrative burden associated with contractor invoicing, settlement processing, direct deposit, court-ordered garnishments and 1099 reporting, all of which are critical for compliance and return on investment (ROI) if you utilize ICs.

5. Improved insurance, compliance and IC engagement

In industries like transportation, insurance can make or break an IC relationship. That is why Openforce simplifies choosing essential coverages, providing ICs choices of where to purchase affordable plans through our network of partners and enabling settlement-deducted premiums billed in arrears that guarantee all required coverages are in place and active.

Contractor engagement can also affect a project—an engaged contractor may prioritize you above other clients, use his or her time more efficiently or engage in future work with your organization. The result is high-quality, timely and affordable services provided on behalf of your company that positively reflects upon your organization to your customers.

Openforce drives contractor engagement by:

• Empowering you to communicate seamlessly with ICs.
• Making the screening, verification and onboarding process quick, convenient and accessible from wherever they are.
• Providing ICs with a streamlined, paper-free way to receive payment from the client.
• Offering full transparency by giving ICs real-time, customizable access to important documents.

6. Better analytics

Every organization needs a tangible way to measure ROI or project success, but those who do not utilize an IC management system often lack the information they need to analyze outcomes.

One of the analytical benefits gained by leveraging Openforce is that clients can generate and review reports surrounding settlements, retention, turnover and more, better equipping them to make changes that improve IC relationship and outcomes.

7. Reduced carbon footprint

Organizations aiming to go green can make a dramatic impact by transitioning from a paper process to an IC management solution, which requires almost no printing or manual paperwork for documentation such as:

• Independent contractor agreements.
• Acknowledgments and authorizations.
• Background and screening results.
• Verification of licenses, certifications and more.
• Banking and settlement information.
• Analytics and reporting.
• Communication history.
• Contact information.
• And more.

8. Superior outcomes

Organizations take on risk each time they allow a new service provider to represent their organization. However, this risk is reduced with each step taken toward due diligence: Adequate prescreening, verification, onboarding, proper relationship management, analysis and communication can all reduce the risk of negative consequences on customer relationships—and your bottom line.

An IC management system automates all these steps and makes it as easy as possible to identify contractors who do not have the qualifications or meet the contractual requirements to become a solid business partner providing services on your behalf. Due diligence is the first step in risk management, and risk management in the client-contractor relationship drives quality, safety and customer satisfaction.

Work smarter and not harder with Openforce

Relying on an HRIS or payroll software to maintain your IC relationships is not only creating a bad fact for you in and of itself, but it also causes confusion in your organization. To streamline your IC relationships, you need an IC management system like Openforce, which offers all the benefits outlined above and more.

The team at Openforce has been providing robust contractor management and risk management services to over 60,000 companies and 300,000 contractors in even the most highly regulated industries for 20 years. To learn more about Openforce, contact us today.