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Contractor Engagement Model

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See how Quadrant can deliver a contingent labour solution that reduces risk, administration, and cost whilst maximising performance and retention of talent.

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Contractor Engagement Model

  1. 1. Workforce Solutions & Optimisation Addressing contractor risk and compliance October 2011
  2. 2. About Quadrant ExecutiveAt Quadrant Executive (Quadrant), our core purpose is to partner with you to help build your organisation’s capability to succeed.We offer breakthrough solutions in talent, business advisory and workforce management services across Australasia that add valuethrough a deep understanding of your needs and a passion for delivering tangible outcomes. Strategic Our suite of best-in-class of services includes; ► Talent Search, Talent Pooling and Talent Acquisition Leadership and Management Development Talent Customer ► ► Sales Review and Capability Enhancement Search & Talent Strategy & People Management Capability ► RPO & Contractor Engagement Models ► Leadership, Talent & Performance ReviewsPeople Business ► Succession Planning and Bench Depth Leadership Outplacement & Coaching Performance ► ► People & Culture Solutions Leadership Workforce Solutions ► HRIS/Payroll and Workforce Management Evaluation Development & Optimisation & Procurement ► Efficient Frontier 2 Operational Commercial In Confidence
  3. 3. Quadrant People Solution We provide your organisation with a compliant and cost effective engagement framework for the entire workforce (including fixed term, contractor, agency and casuals) which delivers: 1. Complete risk mitigation for both your organisation and individuals 2. Reduced ongoing administration costs and spend on external suppliers (including existing agency relationships) 3. Maximum cash flow, net income and wealth creation benefits for individuals 4. Skills retention and an enhanced performance focus 5. An enterprise vendor management system (VMS) for managing contingent labour and statement of work spend 3 Commercial In Confidence
  4. 4. A Compliant Engagement Model Do your business objectives seek to deliver the following? 1. Flexible & compliant engagement solutions for contractors, or the provision of an alternative to employees  Reduced risk profile  Ease of on-boarding 2. Deliver value creation opportunities  Cost savings through lower cost of engagement  Unbundle recruitment  Increased gross margin  Improved productivity  Value-add to contractors  Attraction and retention levers 3. Enable a differentiated service offering and/or value proposition  Increased flexibility  Competitive advantage 4 Commercial In Confidence
  5. 5. Our Delivery Model Quadrant can deliver against these objectives and meet your business drivers: Flexible & Compliant Differentiated Service Value Creation Engagement Solution Offering  Individuals engaged as IC’s  Potential Savings of 5% plus  Branding of contractors  Your company no longer at per engagement, annually  Up front training and down risk of Relevant Contracts  Improved stream up-skilling provisions utilisation/productivity with  Contractors have the ability to  Compliance and engagement stronger performance-based maximise their income risks eliminated assignments  Attractive and easier access to  Fair Work Act and  Increase in gross margin insurances employment provisions not  Attract, engage and retain  Admin burdens for contractors applicable talent managing their own Pty Ltd  Can be either individual, ABN removed with purity of focus or Pty Ltd to meet end customer needs  Complete flexibility  More flexible and direct relationship with contractors to meet changing client needs 5 Commercial In Confidence
  6. 6. How Do We Achieve This? 3R’s Recruitment / RPO Restructuring Re-Engineering On-Boarding  Audit, Assess, Engage  Scope, Advise and  Function is unbundled existing, non-compliant Implement Bespoke where Search & Selection is contractors Solutions performed by the Recruiter and Contractor Engagement by Quadrant.  Quadrant ensures and delivers bona fide compliant and risk mitigation for contractor on-boarding Risk Management & Compliance 6 Commercial In Confidence
  7. 7. Risk of Engagement for Your Organisation The legal landscape for contracting is constantly changing.  Are contractors carrying insurance, as bona fide contractors should?  Is your organisation fulfilling its:  Payroll Tax obligations under the relevant contracts provision?  WorkCover obligations?  Employer obligations when engaging ABN only individuals?  Are you engaging ‘Pty Ltds’?  Are these contracts compliant in terms of the substance (its intention) over form (what is actually happening)?  What instrument (the contract) is in place that removes the “grey” area of current contractual arrangements?  are all parties compliant?  are contractors really employees?  For individuals under Labour Hire income is PSI, unless otherwise assessed.  How are you treating your PSI?  ATO crackdown as per Tax Alert of March 2nd 2011 7 Commercial In Confidence
  8. 8. Contractor Engagement Model Your Organisation MASTER AGREEMENT Payment for Services Sets out overall contractual terms SCHEDULE TO MASTER AGREEMENT Identifies the specific terms and payment arrangements relating to each individual Payment for Services 8 Commercial In Confidence
  9. 9. Benefits For Your Organisation  Compliance  All contractors now engaged by Quadrant  All contractors assessed and structured compliantly  No more engagement risk for your organisation  Relevant contracts provisions removed for your organisation  All statutory payments covered, if applicable  Ease of On-Boarding  Barrier to entry for contractors removed. No need to have a Pty Ltd.  Able to engage to train or up-skill  Value Add for contractors  Competitive Insurances  Engagement solution that provides the maximisation of income in a compliant and administrative free model  Refer Pricing table for value add services 9 Commercial In Confidence
  10. 10. Significant Cost Saving BenefitsCost of Engagement SavingBased on the assumption of 100 contractors @ $80k p.a. income = Total Payroll $8.96mil Assumptions Current No. of Contractors, Sessional,  On the basis that the contractors 100 Fixed Term or Casual Staff engaged direct are non Average Income p.a. $ 80,000 compliant, applicable statutory and Plus Cost of Delivery 12% regulatory on-costs have been Total Annual Cost $ 8,960,000 applied on minimum basis *Cost of delivery inlcudes Payroll Tax, Workers Compensation, Insurances, Adminstration, Payroll, FBT  Also, it is assumed the contractors are all directly engaged as Pty. Ltd.’s and not ABNs Assumptions Potential Savings No. of Contractors, Sessional, 100 Fixed Term or Casual Staff  If ABNs are engaged, then an Average Income p.a. $ 80,000 additional 9% for Superannuation Plus Cost of Delivery 7% under the SGC provisions would Total Annual Cost $ 8,560,000 apply to the T&C cost of engagement. Possible Savings $ 400,000 10 Commercial In Confidence
  11. 11. Next Steps  Develop business case and implementation plan for specific regions or groups if:  It addresses your compliance concerns  Provides a lower cost of engagement  Assists in achieving its business objectives  Present to respective management:  The Quadrant MSA (Master Services Agreement) for review  Implementation & Marketing Plan to contractors Thank You 11 Commercial In Confidence

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