Bunker is shining the spotlight on leaders in contingent workforce landscape. As more and more businesses are shifting to an agile hiring model, Innovative Employee Solutions (IES) is helping facilitate an efficient and mutually beneficial relationship between enterprises and independent professionals. IES is a nationwide provider of contingent workforce solutions that specializes in Payrolling and Independent Contractor Compliance services. Since its inception in 1974, IES has partnered with over 22,000 companies to implement cost-savings and risk mitigation with their pre-identified contract talent.
IES offers its services in over 40 countries globally and across industries, including IT, Software, Defense, Media and Finance. IES is a women-owned and operated business certified by the WBENC, a closely held company, and one of San Diego’s “Best Places to Work” for 10 consecutive years. We sat down with Danielle Itani to talk about key trends in the on-demand economy, and how IES is evolving to support them.
What was the inspiration for creating IES?
Karla Hertzog founded IES in 1974, with the goal of matching qualified workers with professional opportunities. The company started as a traditional temporary staffing firm – back when clients would call in a request for a “girl Friday,” an unheard-of term today used to request temporary admin assistants. In 1998, the business went through a major evolution as Karla saw the employment landscape changing. Companies were engaging temps in new ways, leading to the need for a partner to manage this growing type of workforce. Karla created a new vision for IES, shifting the core services exclusively to “Payrolling” and Independent Contractor (IC) Compliance services, allowing IES to be a true partner for companies engaging a contingent workforce.
What are the biggest challenges with IC compliance that IES is solving for?
IC compliance is always evolving. It’s like chasing a moving target. This requires continued focus on the legal changes and implications of using independent contractors. IES has a dedicated compliance team, continually focused on nationwide changes as they happen in real time. Clients can rest assured that when IES takes on an IC engagement, every element of the engagement has been fully vetted, and the risks have been mitigated. IES developed an online Risk Calculator which assess 1099 worker misclassification risk levels in just a few minutes.
Tell us about your company’s background, and the journey to where IES is today
From its inception, IES, formerly Tops Staffing, was known as a temporary staffing agency. After 25 years, the business shifted its core services to accommodate the changing employment landscape – the contingent workforce. IES transitioned the business offerings to serve the needs of companies that wanted the flexibility to identify their own talent. IES became a provider for contingent workforce solutions and a trusted partner and outsourced specialist to help companies save time and lower risks. In 2006, Kara Hertzog joined the women-owned family business as a third-generation member of the IES team. Today, Kara serves as the president of IES helping grow revenues to over $80 million. While much has changed in the industry, one thing remains true, IES has passion for the contingent workforce and its ability to provide more options for the world’s diverse workforce.
How is IES different from other companies in the space?
IES truly acts as a strategic business partner. As client’s grow, their needs grow. IES grows with you. Our front-office and back-office work together to ensure clients and contingent workers are receiving the best support possible. As an agile partner, IES has the ability to move quickly to meet the client’s ever-changing needs such as onboarding 83% faster and reducing administrative tasks by 50-75%.
How is IES helping the gig economy grow, as well as the gig workers themselves?
Partnering with IES allows recruiters and companies to engage gig talent quickly, efficiently and compliantly. As the gig economy continues to grow, a partnership with a payrolling provider like IES allows companies to engage talent outside their typical pool of workers.
IES helps gig workers by offering a high-tech, but service-backed engagement experience, either as a W2 or 1099 worker. Additionally, for W2 gig workers, IES provides a robust benefit offering to include group benefits, retirement, FSA, Employee Perks, etc. For 1099 gig workers, IES has curated a benefit exchange for workers to have access to secure individual benefits at group rates.
IES offers a tool called the Contingent Workforce Rad Map which provides a step-by-step guide for companies to engage contingent workers and meet their strategic business objectives.
Do you have any insightful stories, or case studies, for entrepreneurs in the on-demand economy?
As the United States navigates through major legislative shifts that impact today’s contingent workforce, especially California with AB5, compliance should be a top priority for all businesses. Misclassification of workers can cause multiple penalties at the state and federal levels and classifying workers of all types is critical. Classifying 1099 workers, or independent contractors, can be especially tricky for many companies.
For 50 years, a non-profit organization engaged their workers as “independent contractors”, however due to the ever-changing worker classification laws, they were contacted by the EDD (Employment Development Department) who advised that their workforce did not qualify as independent contractors and were going to be audited.
What did they learn from the expensive and stressful audit? That they improperly classified Independent Contractors. In addition to having to paying legal fees, they were ordered to pay back-taxes and penalties of $15k per worker retroactively for 5 years.
The organization needed a compliance solution and invested in partnering with IES as their nationwide IC compliance partner to help streamline their IC program, stay compliant, and avoid future audits, penalties and legal fees. The organization now rests easy knowing IES handles all their compliance needs.
How has the Gig Economy changed the traditional staffing industry?
Options for where, when and how to find talent have exponentially increased in the past decade or two. With the advent of technology and the on-demand environment, clients now have options to find talent through a variety of sources, including online talent platforms and these workers can be anywhere in the world. Those of us in the traditional staffing industry have had to look closely at how we can shift our business models to continue to provide value – through technology, strategic partnerships, consulting etc. – and leveraging automation for the more tactical elements of recruiting, onboarding, etc.
How has Bunker helped empower IES to stay ahead of the tide?
Due to tightening regulations many clients have implemented stricter standards for their IC programs, and as a result we’ve seen some ICs who had to obtain additional insurance coverage to renew their contract. These professionals are frequently not informed of insurance standards for ICs, and often push-back due to the added time and expense associated with obtaining coverage. Bunker has been an invaluable resource for IES and our ICs, not only by providing insurance quotes in a matter of days, but they also take the time to educate our clients and workers. Bunker even attended calls with IES to help guide one of our largest clients on their insurance requirements for their IC program implementation. It was great to know that the insurance experts at Bunker had our backs.
Is there any recent company news you’d like to share?
IES is honored to share that our HR Team was named “Finalists” for the San Diego HR Forum’s “HR Team of the Year” award. We are thrilled for our small but mighty HR Team of 5 who is one of three finalists of significantly larger organizations. The winner will be announced November 4th, 2019!
What’s on the horizon? What new trends do you see for 2020?
2020 is a great time to be in this industry! We’re at the start of the 4th industrial revolution and the way work is accomplished is changing. From humans to robots, employed direct or as contingent workers, showing up to the office or working remotely, there is a lot changing! More workers are embracing freelance work. Just the same, more companies are realizing the value of engaging highly skilled professional freelancers to critical functions that add strategic value to their organization.
Because contingent workforce programs were viewed as an expense and co-employment risk, and not a strategic way to add talent, the last 20 years brought Managed Service Providers (MSPs) with expensive Vendor Management System (VMS) technologies, primarily meeting the needs of procurement.
Today, a popular concept of total talent management brings all sources of talent under one strategy and thinks about the total workforce in a new way. HR Talent Acquisition teams are bringing MSPs in house and engaging more with contingent workers by creating a value proposition specifically for them. Innovation has brought ways for freelance and gig workers to connect directly with work in ways that society loves, and yet legislators are slow to embrace. There is a lot to be passionate about at IES today- Innovation is providing more ways for people to find work.
Learn more about how IES partners with businesses to help create customized solutions for all contingent workforce needs including Payrolling, IC Compliance, Human Cloud, and Recruiter Back Office Support. Visit IES today at innovativeemployeesolutions.