5 Ways Outsourcing Contract Management Saves Money

  By Debbie Fledderjohann  |    Wednesday March 30, 2017

Category: Contracting, Expert Advice, Technology


At the end of the day, every recruiter wants two simple things: more time and more money. But some business expenses and time-wasters are simply unavoidable . . . right?

Here’s the secret: you can keep more of your hard-earned money and save valuable time by changing one thing about the way you do business as a recruiter. That one thing is outsourcing contract management. To be more specific, outsourcing the handling of contracts (and employment relationships) with clients and candidates in a contract staffing scenario. Here are just a few of the ways that outsourcing saves you time and money:

#1—You spend less time writing contracts.

For recruiters, time is money. The more time you have available to spend getting job orders, sourcing candidates, and making matches, the more income ends up in your bank account. Any minute (and let’s be honest, writing and negotiating a contract takes more than a minute) spent on other business activities is a minute that did NOT generate revenue.

Maybe you can’t outsource the management of your direct-hire search contracts—but you CAN outsource the contract-staffing-related ones. So why not put time back on the recruiting clock by doing so?


#2—You don’t spend money on legal fees to get your contracts reviewed.

Let’s say you do decide to handle your own employee and client contracts. You then have to get them reviewed to make sure you won’t end up fighting a losing court battle sometime down the line. And legal contract review isn’t free.

Fortunately, if you outsource, you can forget about this part. The best back-office services already use lawyer-approved, time-tested contracts for both employees and clients. And when a client sends their own 50+ page master agreement to use instead, your back-office team should also handle the contract review process.


#3—You stay out of the employment liability equation.

If you outsource, your back-office will function as the employer of record—not you. By staying out of the employment equation, you neatly avoid the risk of co-employment liability or fines.

If you employ the contractors (and handle the contracts) yourself, you are responsible for all the employment liability. Moreover, you could put your client at risk for co-employment liability if the contract terms are not air-tight.


#4—You don’t have to worry about misclassification fines.

A firm that engages a 1099 independent contractor (IC) can be subject to fines and penalties if the individual is determined to have been misclassified. Even having a contract in place that states the individual is a 1099 IC will not fully protect you.

However, having a back-office service engage the contractor can protect you. The back-office will evaluate the appropriate classification for the contractor (1099 IC or W-2 employee) and shield you from the dangers of employee misclassification.


#5—You don’t spend time or money trying to collect on unpaid invoices.

A full-service back-office will issue invoices and handle the collection efforts for unpaid client invoices. You can simply sit back and wait for your back-office to deal with the paperwork and the headaches.

For a recruiter, outsourcing contract management and employment responsibilities in a contract staffing scenario makes sense. You keep more of your hard-earned money, and you carve out more time to spend on revenue-generating recruiting activities. More time plus more money equals even more money!


Founded in 1988 in Canton, Ohio, Top Echelon’s mission statement is to “help recruiters make more placements by continuously exceeding expectations.” Top Echelon started solely as a split placement network, but it has expanded over the years, growing with its customers and creating new products and services to meet the needs of those customers. Top Echelon helps recruiters make more placements through its three main products and services: Top Echelon Network, the leading split network of recruiters; Big Biller recruitment software for applicant tracking; and Top Echelon Contracting, the recruiter’s back-office solution. Visit www.topechelon.com to get started today!

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