Why Recruiters Should Consider Offering Benefits to Contractors

When it comes to recruiters and employers, the two most important words in the Affordable Care Act (ACA) are employer mandate. That is the provision in the act, commonly referred to as Obamcare, that will require employers with 50 or more employees to provide health insurance to those employees. Even with the mandate being delayed until 2015 (tracking to begin in 2014), many employers and recruiting/staffing firms are preparing now to comply.

Even if you don’t have to provide healthcare insurance to your contractors, that doesn’t mean you shouldn’t. Having a full menu of benefits is one of the best marketing tools you can have. Consider this: In his recent www.ere.net column “Don’t Forget the Critical Role That Healthcare Benefits Play in Recruiting and Retention,” renown HR thought leader Dr. John Sullivan states that, along with salary, benefits are the #1 attraction factor for candidates. This is only going to become more important as Obamacare’s employee mandate kicks in, requiring most Americans to have insurance starting in 2014.

Sullivan predicts that companies and firms that do not offer benefits will lose quality workers to the competition. 

“Because firms that offer healthcare benefits will make it a prominent selling point in their posted jobs and in their recruitment advertising, you will find that many ‘in-demand’ workers will never even consider applying to your firm,” Sullivan said in his column. “You may still be able to fill your jobs, but the quality of your applicants will go down significantly. This will hurt productivity and you eventually may have to pay more, thus negating any savings that you accrued by not offering health benefits.”

While Sullivan is not specifically addressing contract staffing arrangements in his column, it’s no secret that one thing that holds workers back from taking more flexible contract assignments is the lack of benefits. So you can imagine the caliber of contract candidate you could attract if you made benefits available to contractors. Having a full menu of benefits, including a quality healthcare plan, can also help you retain contractors so that you can place them over and over again, securing recurring revenue for your firm. Having access to affordable healthcare is can now be added to the list of benefits of being a contract employee.

But how can a small recruiting firm afford to offer benefits and find the time to administer them? Fortunately, this can all be outsourced to a contract staffing back-office service. As the employer of your contractors, a quality back-office will offer them benefits. They will also handle all the other employment tasks, including payroll processing and funding, invoicing and collections, unemployment, Workers’ Compensation, background checks, and more.

When selecting a back-office, be sure that they offer a FULL menu of benefits, including group medical, dental, vision, life, and 401(k). It’s also important that their healthcare plan is an ACA-compliant plan that will fulfill the requirements for the healthcare coverage the workers must carry under the employee mandate. Proceed with caution here. Some back-offices will only provide a bare-bones medical plan that provides little benefit and does not fulfill the Obamacare employee mandate provision.

When candidates consider accepting a job offer, whether it be direct hire or contract, they look at the full package, including benefits. To get the cream of the crop, you may want to consider making benefits available to your contractors.

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