Monday, November 11, 2013

Mitigating the Biggest Risk in Hiring IT Service Professionals

Posted by Peter Cannone, CEO of OnForce

If you haven’t caught the latest Gartner global analysis on IT staffing trends, it’s certainly worth a closer look. One of the key findings from this year’s report is that staffing remains the largest cost category for the IT budget, representing a global average of 41 percent. Along with that news is the recent PayScale survey, which found that tech companies have the highest reported turnover rate.

When you consider how much of the IT budget is allocated to staffing, the high turnover in our industry, an unemployment rate holding steady at 7.4 percent, and shrinking employee benefits packages, it’s clear that a new business model must emerge for identifying and vetting IT talent. Reinforcing the need for a new model is the results from a recent survey, which found that 60 percent of IT service professionals voluntarily joined the ranks of the self-employed.

Combined, these factors have resulted in the emergence of the Workforce-as-a-Service model, where businesses hire skilled IT talent for contract assignments to address short-term business needs.

It sounds ideal for the IT service professional who wants to be their own boss and it’s a viable alternative for businesses that need to keep the business running whether they’re quickly growing, needing to sustain a product line or are managing gaps in the workforce.

Yet as this new WaaS business model emerges, companies and independent contractors need to prioritize the “business of their business.” Specifically, protecting themselves from liabilities should anything go awry during the course of the assignment.

These incidents can range from simple falls resulting in physical injury to more complex scenarios driven by the fact that the IT service professional has access to sensitive information and infrastructure.

What often happens when a 1099 employee comes on board is that both the client and the IT service professional have a standard contract in place. It’s not uncommon for both parties to give the contract a cursory glance and assume they’re safeguarded against any physical incidents or compromises of intellectual property. And if a third party introduces the IT service professional to the service buyer, it’s often assumed that the assignment is fully protected.

Yet what is not widely known is that in many instances the assignment is only partially protected. Or worse, the IT service professional opted out of obtaining insurance.

Of course, the last thing anybody wants to think about when they’re bringing on an IT service professional is that something could go wrong. And sure, insurance isn’t always the sexiest topic to discuss – until something goes wrong and it creates a substantial impact and/or captures the attention of the mainstream media.

So what should service buyers prioritize before they enter into an agreement with an IT service contractor?


  • Insurance that covers liability, workers’ compensation, and errors and omissions. 
  • Proper classification of contract employees according to federal and state guidelines. 
  • Full background checks and client reviews. While background checks are table stakes these days, let’s not overlook recent innovations in technology that allow us to check on the public ratings and service buyer experiences of working with individual IT service professionals.


As more businesses look to maximize returns on that 41 percent of the budget they’re allocating toward IT staffing, it make sense that they look to the independent workforce to augment their teams on an as-needed basis. In fact, many service buyers report a cost savings of between 30-60 percent through the Workforce-as-a-Service model.

Yet before the service buyer signs on the dotted line, they need to be sure the proper mechanisms are in place to protect them and their business before any IT service professional steps foot onsite.

No comments:

Post a Comment