summary
Pinnacle Group partnered with a financial services client to implement governance around contractor assignment tenure. This included leveraging automation in the vendor management system (VMS) to flag upcoming or overdue assignment tenure violations, communications & training to client users, end-date validations at time of extension, and regular cadence assignment tenure audits.
Using our extensive experience as a Managed Services Provider (MSP), Pinnacle Group was able to dive deep into the company’s data, develop a plan, and implement new policies that changed the way this financial services client managed their contingent workforce.
As a result, these additional layers of governance significantly reduced the client’s risk of co-employment.
The Challenge
A large financial services company was using contractors for extended periods of time, some with 10+ year tenures. Few controls were in place to monitor contractor assignment tenure, and assignment extensions were not validated prior to approval in the VMS. This put the company at great risk for co-employment issues.
According to Staffing Industry Analysts (SIA), “Co-employment, or joint employment, is when two employers are jointly and individually responsible for compliance with the duties or obligations of an employer in respect of work performed by a single individual.” The longer a contractor’s tenure is, the greater the risk of a co-employment claim. .
Pinnacle Group was tasked with creating additional controls that would help address these issues without impacting the overall business operations.
HOW WE HELPED
Pinnacle Group analyzed worker and assignment data to develop a plan to tackle this tenure management issue. Based on Pinnacle’s recommendation the client decided that two consecutive years would be the new standard limit for contractors on an assignment. Then a contractor must wait at least 12 months before returning to the client in any capacity.
The program was then rolled out strategically so as not to disrupt business continuity by creating a mass exodus of talented contractors. Pinnacle Group figured out which skill sets, business units, sponsoring managers, and suppliers would be most impacted by these changes, and determined if the current supplier base was properly prepared for the changes and capable of backfilling roles that would be affected by the tenure policy.
Pinnacle Group drafted a communication plan with templates, timelines, and recipients. Upon client approval, Pinnacle and the client jointly executed the policy’s implementation, starting with a small sample size of the contractor population as a test group. To ensure program compliance, Pinnacle created automated notifications and warnings to alert client managers when it is time for assignment extensions.
impact
Results from tenure management programs are felt across the organization. The average assignment length has dropped by 15% and is well below the two-year threshold set by the program. The client mitigated co-employment risk while maintaining business continuity and maintaining high satisfaction scores.
The client’s procurement manager had this to say about the impact of the tenure management program, “We have undergone an evolution of our staff augmentation program over the last year that would not have been possible without the thought leadership, expertise, and partnership from the Pinnacle team. Without them, the improvements made to our program, simply put, would not be possible.”
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