Determining the correct wages for temporary and contract payroll can often be a daunting task for even the most experienced contract recruitment consultant. Due to the complexities that staffing agencies face on a day-to-day basis relating to contract and temp payroll, we have developed a short checklist of common mistakes that should help you get your ducks in a row!
1. Insufficient information
Obtaining the correct information at the meeting with the client is critical to successfully paying and processing your payroll. The cliché of “The Devil is in the detail” is accurate as collecting insufficient information will set most teams up for a pitfall of errors.
Some of the most common areas that are missed are:
- Appropriate skill level applied to the job/ rates card for example CW 1 ( a) Vs CW1 (b)
- Incorrect award or agreement that the employee is being paid too…….. for example the client may work in engineering services and arguably could be paid under the National engineering award however the position maybe an administrative position and should be paid under the clerical award
- Incorrect allowances applied to the skill level
- Incorrect Work Industry classification code for workers compensation is applied
- Spread of hours to be worked
- Shift information
- Length of assignment
2. Ambitious and busy sales team
Depending on the culture of the organisation, many companies control their office overhead costs and a formula is built into a Job Rate Calculator. This may be appropriate for the organisation, however some sales persons can manipulate spreadsheets and apply lower pay rates, incorrect WIC codes or even neglect to pay appropriate allowances.
Some sales people aren’t very good at managing their time, which might lead to rushed quotes. Some may push out contractor and temp quotes without a manager reviewing and approving the quotation, it is important to have approval / review processes in place for this reason. Contingent staffing businesses are somewhat transactional by nature; so when the heat is on it is on! This opens the business up to mistakes and mistakes cause headaches when it comes to dealing with your money and your clients money too!
3. Incorrect client information
Getting the right information from the client is critical from the beginning when taking an order and commencing a contract / temp recruitment assignment. Often the person ordering the service does not have the background, and hence the consultant needs to appear an expert. Having all of the relevant information such as the company’s Australian Business Number or the appropriate awards is essential. The staff member may have to engage with a number of people at their new clients’ business or conduct the appropriate research to get the correct information on the client and the temp assignment.
4. Selecting the wrong rates card or occupation library in your Recruitment Management System
Many of the current systems have “Occupation libraries” or “Rates cards” pre-set in their front office operational systems. These are pick from a drop down box where mistakes are errors are rife! What’s worse is that this will flow to the payroll system and before your payroll team even receives a time-sheet, the rates card for the job is incorrect! Hence creating a number of hidden costs for your business and re-work for all of the team members involved.
5. ABN / Contractors
A common mistake for those recruitment agencies that believe they are immune to risk is not accruing for payroll tax / workerscompensation and superannuation. For those that work in the white collar and professional contracting space, many of your contractors are placed in “set and forget” roles and before you know it a year has passed and John or Sally’s contract could be determined by the legislative authorities to be a full time employee. WHAM! Your business may be deemed to pay the statutory costs relevant to the placement. I have seen this many times when contractors placed for a 3 month or 6 month assignment and they keep getting extended and extended and extended. Your consultant will be very happy about that as they maintain their commission levels for the placements, however, ultimately its your business that is going to be held over the barrel!
Ratescalc is here to help
A cloud based technology that can support your existing business by removing some of the manual human intervention that is open to mistakes. Ratescalc.com has been designed by experienced industry professionals that have experienced these problems themselves, run their own businesses and understand the challenges surrounding this complex landscape.
Ratescalc.com could also be the shining light your business needs to broaden its service offering by enabling your business to venture into markets that were previously foreign to you. Supporting all industries, Ratescalc.com can enable any staffing agency that supply
- PAYG employees in a casual or on a fixed term full-time basis
- Contractors / ABN holders
Ratescalc.com can also support
- Group Training companies
- Australian Apprenticeship Centres
- Registered Training Organisations
With all modern awards managed within the platform and the ability to support any certified or employment agreement in the market, Ratescalc.com will be your newest best friend, your payroll / finance team will love you for it- we guarantee you!
We understand how frustrating errors in payroll can be for all stakeholders. We have developed a Failsafe checklist for your team to ensure your team remember all of the pertinent questions in their client visit!
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