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As a rule, New Zealand companies who have not put in place best-practice methodologies for managing contract workers, are invariably working with out-dated methods for engaging and managing contract workers and potentially leaving themselves at risk.

Contractors can enter and operate in your organisation in a number of ways. They can either be engaged directly with your organisation (i.e. through Crackerjacks) by issuing an invoice or timesheet for work done and receiving payment via accounts payable, engaged as a ‘fixed term’ worker on the PAYE system, or they will be handed over to a recruitment agency for payroll and management.

The practice of using multiple agencies, in many cases combined with a direct sourcing effort, gives rise to multiple sets of costs, on-boarding processes, time sheet approval, invoicing and payment.  There are variations between the way insurance, contracts, visas and statutory and company compliance polices are addressed, therefore putting your company at risk of policy irregularities.

Additionally, reporting is non-standard or not apparent, cannot be consolidated and, critically, gives no visibility of spend.  These variations create the exposure to additional costs and unmeasured risks to the organisation as well as cumbersome processes for hiring managers and accounts payable.

These methods present a myriad of potential problems to organisations. Research shows that approximately 85% of organisations using contract workers are not even able to determine how many contract workers they have, nor can they determine what those contractors are doing or how long they have been doing it, where they were sourced from or how much they are being paid.

The above is an excerpt from a CXC Global Research Whitepaper that discusses current models and practices, risks and the Disaggregation Process for Best Practice.  To request a copy of this whitepaper or to find out how CXC Global assists businesses in achieving Best Practice please contact Kirsty Erasmus on (09) 353 1981 or Kirsty.erasmus@cxcglobal.co.nz