W2? 1099? C2C?

One of the questions I get asked most often from those considering contract work is whether to work as a W2 contractor or should they consider 1099, or incorporate so they can bill corp-to-corp (C2C). The answer is – it depends – and it mostly depends on you.

If you are going to contract long term, or you have a particular expertise that you sell, eventually you will move from working as a W2 Contract Employee to being Independent / Incorporated – in other words: A vendor. These are not mutually exclusive, BTW. When you’re a vendor that means that you could be billing on a 1099 basis or you could be incorporated and use your corporation to bill the agent or client corp-to-corp (C2C).

When you choose to bill as an independent vendor that means you are viewed as a business, which is a separate legal entity, and completely different from being an employee. When you’re independent, you have all the privileges and responsibilities of a business owner.

“Responsibilities” is the key word here: If you choose either 1099 or C2C, you will take home a lot more money than you would as a W2 Employee. But if you are not prepared to handle the responsibilities (and risks) of being self-employed, mo’ money mo’ problems.

Whether you are a sole proprietor, in a partnership, or a principal of a corporation, if you are deriving “Schedule C” income, you are responsible for obtaining business licenses, paying business taxes, keeping accurate records, maintaining general liability, and other types of insurance. If you’re working as a vendor, you may need to purchase and maintain your own tools, equipment, prepare your own contracts, invoices, and track your payables and receivables. Some clients will provide you a 1099 form for taxes; some do not. Sometimes they’re accurate; sometimes not. Regardless, you are responsible for an audit trail of your gross receipts and expenses, maintaining bank records, and insuring you adhere to all applicable laws. If there is a discrepancy, you need to be prepared to prove everything.

When you are independent or incorporated, you are a vendor. Instead of a job description, you have a statement of work (SOW). The SOW details what you are to accomplish for the client, a time frame for doing so, and what are the payment and acceptance criteria. SOWs can be very general or very specific. There’s no “standard” SOW. Its specificity varies by the complexity of the project and your relationship with the client.

When you are a vendor, the client cannot dictate the manner and means by which you complete your work. So, if you wanted to assembly your PB&J in a different order in your kitchen that is your prerogative. The client can only accept or reject the work.

Most importantly, if you are billing as independent or incorporated, you do NOT have the same legal protections as you would if you were a W2 contract-employee. You are a vendor, just like the Crystal Geyser guy. If the customer decides to go with Sparkletts, Crystal Geyser doesn’t file for unemployment. If the delivery truck gets stolen, Crystal Geyser doesn’t ask the customer to buy them a new one. Similarly, like the Crystal Geyser vendor, you also have an implied warranty with your service. If something goes wrong, your service is defective, you drop your Pepsi on someone’s laptop, it’s not a “My bad!” you are financially liable for that expense. If your work is on the critical path of a project, be sure to talk to an insurance agent and your client to ensure you have the coverage you need. If you own things – like a house – and want to keep it, you’ll need to incorporate.

You want to run a business? Make big bucks? We live in a litigious society. Don’t take chances.

Unlike W2 workers, your client will want to pay you every 30 days just like they pay all their other bills. But, what if your client doesn’t pay you in 30 days? What if they pay you in 45 days or 60 days? Or not at all? How long will you keep working without being paid? A week? A month? Two months? How will you collect if they don’t pay? (A big concern in today’s “virtual” world.) What if they claim your work is defective, and they refuse to pay? Similarly, who pays for your travel expenses? Are you putting them on your own credit card and waiting for client to reimburse? What if they don’t reimburse you or take months to do so? I’ve worked in big corporate offices my entire life: You’d be amazed how many rich companies don’t pay their bills on time.

If you suffer from people pleasing, can’t say no, can’t write a contract, could never see yourself suing someone, or all this sounds just too unpleasant for you, don’t waste time billing as an independent or incorporated contractor. I’ve listened to lots of stories (mostly from women I’m sorry to say) who thought they could handle this kind of relationship, and ended up being taken advantage of by someone who was really, really going to pay them as soon as <somecrisis> passed.

There’s a certain amount of cold, hard, capitalism required when you truly work for yourself. I can assure you that no one is more unpleasant than someone who owes you money. You can’t put up with excuses. Other people’s bills and emergencies and sick kids are NOT your problem. Always track your hours and tasks; always keep copies of your work. Be prepared to withhold work until you are paid for it. Be prepared to walk off the job if you’re not paid on time, and be prepared to sue.

If you have a tough time sticking up for yourself, can’t handle people’s anger, or you’re afraid of being “mean,” being a vendor is absolutely not for you.

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Excerpted from: The Temp Job: A Survival Guide for the Contingent Worker. Copyright 2021. Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission. info@piercewharton.com.

August 4, 2021 0

Phishing for Employment Docs

Of course, you would never provide a telemarketer or Nigerian Prince your passport, credit card, or banking information. Those we know. But what if it were a Zoom call, and then you were offered a great job? How much diligence would you do before you turned over your ID, SSN, DOB, and a whole bunch of other personal financial info?

Phishers are using Video

Here’s how it works: You are a high-income individual. You are contacted by a head hunter and asked to interview for a position at a desirable, well-known corporation. The video interview goes well, and a day or two after the call, you receive a verbal offer (via the agent or “implementation partner”) and a request to start ASAP. Congratulations! So happy for you!! Now, please provide passport, social security, bank account, DOB so they can expedite your offer letter. You never hear from them again.

Signs of a Phisher

There’s a HUGE rush for you to start; they need your info ASAP
Everything is verbal. You email, they call. You ask for docs, they call.
They want a “deposit” for your equipment, a credit card is fine…what’s the security code?
Staffing or “implementation partner” has a thin website. No corporate officers, no street address, no phone numbers, no contact information.
You’re not 100% sure to whom you report.
Offer, contract, or SOW is coming soon. When it does, it looks like it was put together by a 3-year old.

Trust Your Gut

In all cons, the mark inevitably says, “I knew something was wrong..…” Closely followed by, “But, everyone was SO nice!”

The con is counting on your want of the job. Stay focused. Even if its a dream job (and they always are), if something seems off, don’t ignore your Spidee-sense! Cons are charming and charismatic; that’s how they gain your CONfidence !

Remember: Just because there’s a person on video asking you questions that doesn’t mean they are who they say they are. Anyone can ask a question, and far too many interviews are completely one-sided!

Cons choose common names, so they’re hard to Google. Others Catfish legitimate LinkedIn profiles, especially if they lack profile pictures. Did the “client” vid-in or not? Do you have legitimate contact information? Multiple email domains with multiple parties? Offshore? If so, you have reason to be concerned.

Do Your Diligence

Before you turn over your ID and financial information to a staffing agent or prospective employer, be sure that you’ve done your diligence! You have a real contract, employee handbook, and benefit package. Ensure you understand who owns the company, where they are physically located, and who, exactly, is responsible for paying you. If you have any concerns, be sure to contact your prospective manager or client contact. Get all your questions answered – in writing – before you turn over any of your personal information.

Say Nothing

Once you’ve discovered the con, cut-off all contact, and resist the urge to call them out on it! They will only assure you that you are mistaken, and details you impart about how you caught on, what they did wrong, where they were sloppy, will only help them to improve their process. Check your ego. Click delete. Select Block. And, keep your brilliance to yourself!

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If you enjoyed this article, check out some my posts and podcasts on employment, interviewing, and the contingent job market. Thanks for reading!

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July 26, 2021 0

Four Reasons No One is Responding to Your Job Posts

The job market is on fire. Not only are we experiencing the Great Resignation, we’re in the middle of The Great Reshuffling, which will result in The Great Consolidation. If you’re serious about keeping your doors open, a “post and pray” recruitment strategy isn’t going to cut it. Want to get people in the door? Here’s four reasons no one is responding to your job posts:

Your Application Process

Every job site allows employers to choose a “quick apply” or “one-click-apply” option. Use it. Being user friendly and mobile-friendly is a must. A huge number of people ONLY have internet access through their phone. Any company that is insisting applicants go to their site, set-up an account, (some with multi-factor authentication! Really?!), and then populate several forms (with mandatory fields like month and date of my degrees and jobs), is likely to have very, very few applicants.

Also, if you’re going to use Quick Apply, use Quick Apply! Employers who embed additional questions into their quick apply aren’t clever, they’re disingenuous, and it makes me not want to work for you.

Finally, there isn’t a single recruiter out there who thinks AI screenings are helping your efforts. There’s a reason people went to college! Read the resumes! Most importantly, focus on what the applicant has to offer, not poking holes into their background and creating a checklist of what they don’t have.

Essay Questions

I know it’s super-easy and awesome to have each applicant write an essay on how they would deal with difficult stakeholders, or describing their last project, or even telling you why they want to work for you (why not all of them?) That way, you can review, discuss and critique each response and each candidate at your leisure — you don’t want waste your precious time calling or emailing anyone. Essays are perfect for you…but here’s the problem: It’s all about you, and it smacks of entitlement. Worse, it tells me that you don’t see writing as work, which it is. To do it thoughtfully and well takes (my) time, which is the same as (my) money.

Essays are perfect for you…but here’s the problem: It’s all about you, and it smacks of entitlement.

Essay questions embedded in ‘quick apply’ options are infuriating because you can’t opt out of the question or skip ahead. So, since I can’t opt-out of the question, I close the browser and opt-out of the application. It’s usually too late, though, because they’ve got my email, and I’ll be hit with a ton of notifications reminding me to complete my application (which I don’t).

Interestingly, you’d think it would be the big enterprises, and the highly-coveted employers who insist on the “tell me why I’m so beautiful” essays. Nope. It’s the small shops and public employers who have the most hoops when it comes to applying, and that’s why no one does.

Your JD Lacks Focus

A lot of JDs are a laundry list of nice-to-have experiences intermingled with tasks and requirements. Many applicants – especially women and “freshers” – disqualify themselves because they don’t meet all the requirements. More experienced applicants, note the confusion and disconnect with reality, and pass on applying.

If your JD is a laundry-list of tasks, requirements, and nice-to-haves thrown together in no particular priority, your lack of focus and thoughtfulness is a BIG red flag to any quality applicant.

A good JD should be no longer than a page. It should clearly describe the core responsibilities, and to whom the position reports. Education, credentials are clearly stated, and requirements are listed in order of priority. The Must have Security Clearance line should be at the top of the list of requirements, not the bottom! Don’t use the “Preferred” section to obfuscate real requirements (Mandarin speaking “preferred” when your entire team is in Hong Kong? Stop already!)

Most importantly, stop looking for unicorns and purple squirrels; you are not the prettiest girl at the dance, and your hubris is counterproductive to building a real team. Whenever you hire anyone, you need to be prepared to compromise and change both yourself and your organization based on the talent available in the market. If you don’t want to change…..

Bad Habits

Why are so many employer’s struggling to hire? The answer: Bad habits. Zero training on how and what to hire. Zero training on how to interview. Toxic managers with high-turnover permitted to hire and fire “at will.” With human resources the most important asset a company can have – in 2021 – how could this be?

First, let’s recognize that for the past 100+ years, employers have never had to compete for labor. Sure, they said they wanted to be “attractive,” but that’s not the same as being competitive. We know lack of competition stifles the invisible hand of the market, and the over-supply of labor verses limited jobs has resulted in a ruling class of corporate executives — America’s Royalty — whose every want and need must be accommodated because they are “job creators.”

Historically, businesses never worried about competing against one another for talent. Now that they must complete, many simply do not know how.

Labor, unlike employers, has been forced to be nimble and adaptable. We’re used to fierce competition, no safety net, and changing direction quickly. Workers have had decades of practice and advice on how to compete for work, how to write good resumes, how to answer questions in interviews, and most importantly, how to be a subordinate and compliant worker. What training do employers have in how to hire people and how to be a good employer? None.

Employers need to act quickly and level-up their hiring game. How? Create hiring committees, dump toxic managers, bottom-up your culture, hire professional recruiters and coaches, finance real retention strategies. Most importantly, understand that your interviewers are brand ambassadors, just like your salespeople. They represent The Company, The Culture, and The Brand. A bad interview experience can damage your brand – permanently – and that is not something you can afford in this highly-competitive labor market.

Final Thoughts

This labor shortage didn’t just happen – it’s been coming for decades – the perfect storm of Covid, bad corporate behavior, retirement/death, and this ubiquitous social media has weakened the stool upon which capitalism has balanced for centuries. Covid’s timing could not be more remarkable. It has jolted our attention to the global economy, our reliance upon technology, the importance of essential workers, and a Kafka-esque understanding that we are more than our labor.

No workers = No customers = No business

If you’re still clinging to the notion that the tight labor market is about lazy millennials or enhanced unemployment benefits, and any minute we’re going to “go back” to the way it was, you’re flat-out wrong. Our world, has fundamentally changed, and if there’s one thing we know about change is that it never changes back!

When it comes to sales, businesses understand competition. That same focus and concern must carry over into resource management. If they can’t compete, just like in sales, they will be out maneuvered by those who can.

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If you enjoyed this article, check out some my posts and podcasts on employment, interviewing, and the contingent job market. Thanks for reading!

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July 20, 2021 0

How to Evaluate Your Boss

People leave managers, not companies. Be sure you hire a good boss. When workers have a good manager, they will often accept lower wages. When people quit, they’re firing you. You can’t put a price on a great boss…..

Nothing I just said is new. But, despite all the well-intentioned talent acquisition and retention initiatives embarked upon by company recruiters, I’ve yet to encounter any organization who routinely surveys a manager’s direct reports for feedback on his/her performance.

The answer as to “Why?” staff don’t evaluate managers ranges from the complex (cultural of hierarchy, management v. labor, men v. women), to the paternalist notion that a job is a “gift” that your corporate “family” gives you and you should be grateful for their kindness (versus the negotiated sale of your labor to a disinterested company who then sells the fruits of that labor to a 3rd party for a tidy profit), to the simplistic — but very real possibility of – retribution. All topics for another day.

Most of us are given a boss; we don’t get to choose one. However, if you find yourself in a position to evaluate your potential manager (or feel the need to leave an anonymous note on someone’s desk), here are ten questions to help focus your review:

True or False

~I know my boss always represents me and my skills in the best light.

~I trust that my boss is a strong advocate for me and my career.

~I believe that my boss is an effective advocate for my team.

~If there are changes or meetings with my client/workgroup, my boss informs me of the nature of the meetings so we can discuss how it might affect me or my work.

~My boss seeks to understand fully my situation or problem before s/he offers advice.

~My boss respects my work and appreciates the role I play within the company.

~My boss seeks my advice or input before making decisions that directly affect my job or affect our clients/customers.

~When I have a problem or situation I cannot handle, I am comfortable seeking advice and mentorship from my boss.

~If I were traveling with my boss, and we were stuck in an airport, s/he would make the time there better and easier.

~If I were in a position to hire my boss, I would.

What do all these questions have in common? Integrity. Respect. Leadership. These aren’t skills, they’re qualities, values. You got ’em, you practice them, or you don’t. Leaders inspire others to follow, they don’t tell people what do do. There’s no such thing as contextual integrity. You don’t get to be a great boss being respectful most of the time……

Whenever I interview with a prospective manager, I always ask, “If I were with your team at a happy hour, what would they say about you?” I’ve gotten answers that range from the hostile to obtuse…few have shown any genuine insight in one’s character, never mind management style. We all know how important a good boss is. Maybe the time has come to finally shift our focus from top down to bottom up?

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October 12, 2018 0

Where are my RFP Responses?

In one of my management classes, a group activity was to prepare a Request for Proposal (RFP). The purpose of the RFP was to hire an event company to create and manage a 300-person company picnic. No other specifications were given — kind of like real life.

The teams set to work creating the RFP. Most assembled a list of basic information for the vendor such as a date, number of people, and budget. A few of the groups had specific requests such as a special theme or specific venue. After a half-hour of discussion, the groups were beginning to disband, all except for Detailed Dina’s group. Detailed Dina was the project manager for her team, and she was not going to be so sloppy.

Keeping her group well past the time allotted, she insisted that the RFP include a questionnaire, which asked for references, sample menus, descriptions of other events done, for whom, when, what was the cost vs. the final budget of these events. What type of picnics had the vendor done before? What kinds of themes? For how many? She also asked for credit and banking references, and a list of their subcontractors. Dina assigned each team member a portion of the RFP, and then offered to assemble the final product herself (so it was up to her quality standards). An hour after everyone else left, Dina was satisfied and exceedingly proud of herself. She demonstrated collaborative leadership, and was a team player by taking on the task of assembling the final RFP. Dina was confident her outstanding RFP would result in a superior picnic.

The RFPs were farmed out to the vendor groups. Among the ten RFPs presented, the teams needed to choose five to meet and three to respond.

After all the presentations and discussion were completed, Detailed Dina’s RFP was not selected. Aghast at the slight, Dina demanded to know why no one selected her event. The answer was simple. There were other clients, and her application was too much. Said one team, “I know it’s a game, but it was just so ridiculous….” The instructor tried to mix it up bit. Everyone knew that Detailed Dina has no interested vendors; therefore, whomever bid on her contract was guaranteed to win the business. Wouldn’t that be easier than competing against so many others? Would any team trade creating three proposals for her one?

Lesson #1

First, Detailed Dina made an amateur mistake: She refused to scale. It’s a picnic, not a shuttle launch. Dina was so fixated on her emotional need for data because she felt that more data would help her to secure a quality vendor. Unfortunately, this project wasn’t about data, it was about teamwork and goals. Dina lost sight of the goal, which was to form a relationship with a vendor (which she failed to do), and then manage the relationship (which she was unable to do), for the company’s benefit (which never happened).

This project wasn’t about data; it was about teamwork and goals.

And, while Dina was adamant that she had a far superior RFP, and was friendly and collaborative with her team, no one could argue that if this were real life, her leadership was a failure. Bottom line: They needed a team to do this event, and she was unable to assemble a team.

Lesson #2

This story is also illustrates the shift in the American labor market. You’re hiring a <jobtitle> to do <somethingforyou>, you’re not marrying the guy! Because Dina was in a position to choose and pay the vendor, her attitude was one of entitlement. They needed to “prove” themselves to her.

Your hubris is counter-productive to building a team

And, while we all seek qualified vendors (and it’s natural to feel a little entitled when you’re writing the checks), remember that you’re not the person actually doing the work. If you’re an employer, your attitude needs to be one of partnership, not entitlement. You’re hiring someone because you CANNOT do the work yourself. Your hubris is counter-productive to building a team.

The Conclusion

Dina was surprised by the silence that followed the easy offer of her business.

Dina immediately offered explanations of the rationale behind the formulation of her RFP. The teams quietly discussed the trade-offs of a relationship with Detailed Dina. With fewer clients it could be less work – initially – but since this was a “fixed-price” bid, what was the risk that Detailed Dina would be a difficult client who needed lots of attention, extras or changes? How would that effect the time they spent on this class project?

I think we all know what happened here.

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Excerpted from: The Temp Job: A Survival Guide for the Contingent Worker. Copyright 2017 Pierce/Wharton Research, LLC. All rights reserved. No part of this post shall be reproduced without permission. info@piercewharton.com.

August 27, 2017 0