When both the coffee and the fancy lobby become an afterthought

Last year I spoke at a GigaOM conference.  I was a panelist on one of my favorite topics, engaging independent contractors using legally compliant models.  But, while at the conference, another panel about co-working caught my ear.

One of the speakers was Don Ball, co-founder of a successful co-working space in Minnesota.  Co-working spaces are shared workspaces where freelancers or even small startups can get a wifi connection, a few desks (typically in a open, collaborative floor plan) and minor administrative services in a reasonable, flexible fee arrangement.  It is often thought of as the evolution of the typical corner coffee shop, with a bit more interaction among the customers.  In other words, a co-working space is the place to go when your day is less about the coffee and more about productivity.

Ball and others in this particular panel were making the point that larger companies will increasingly take advantage of the co-working trend.  Even Fortune 500 companies can find ways to utilize co-working concepts.  After all, the core idea is that a technology-enabled contributor does not need to physically be in any one specific location to be productive.  So, by essentially setting their employees free to “roam,” the large corporation can save millions by reducing its significant real estate footprint while potentially reaping other benefits, such as happier employees and a more geographically distributed sales force.

Already, it’s predicted that more than 50% of the private workforce will be independent by the year 2020.  These will be people utilizing new places to work.  Imagine adding to that mix larger corporations that want to reap similar benefits.

It is entirely possible that we are witnessing the beginning of the end of the fancy corporate office space.

America’s Trickiest Laws, Vol. II – Contractor-Employee Classification

The use of contingent workers has become a key component of many companies' human capital management.  Independent contractors minimize headcount, maximize flexibility and often allow a company to use more specialists than its size would ordinarily permit.


But, the era of contingent staffing has created a tricky challenge.  Federal and state governments have taken a strong interest in the classification of workers as contractors versus employees.  In a nutshell, a contractor classification costs the government revenue.  And the misclassification of employees as contractors has reportedly cost the government billions of dollars.


Unfortunately for business, getting the classification right is no easy task. The 11 factor test of the IRS is helpful but it is neither clear cut nor weighted.  On top of this, the states have different, fluid standards of their own.  The costs of getting it wrong are significant, from fines to the possibility of personal criminal liability for company officers.


The good news is that as attention to classification issues increases, so have the resources for helping to address the challenges.  Experienced commentators have taken a renewed interest in the topic, publishing useful guides to dealing with contractor management.  Third party vendors have emerged that will provide objective contractor testing and employer of record services to insulate companies from many of the risks of using contractors.  One that I have personally used with great satisfaction is MBO Enterprise Solutions, which recently published a case study on its success at Levi Strauss.


Contingent staff have become a critical tool in achieving big goals in corporate America.  Being aware of the challenges that come with contractor classification is important to running a successful workforce solution.