the architecture of constructing a practice

  • anchor

    why hiring full time can really bite....

    Gregory Walker
    Oct 20, '11 11:02 AM EST

    jammed up with proposals, but this very timely article in the times caught my eye because i genuinely believe it's a major reason people are scared to hire full time right now (forget the threat of future regulations - pure bunk and posturing). consider their example case:

    "Here is how the math works: Say you have a 10-employee business in Illinois. If you had not had any unemployment charges during the previous three years, the state unemployment insurance rate would be 0.7 percent — the Illinois minimum — of the first $12,740 of each employee’s wages, costing your business about $900 per year. If a laid-off employee then collected $10,000 against your account, your rate would go up to almost 5 percent, increasing what you pay to more than $6,000 a year for three years and costing your business more than $16,000 in increased unemployment insurance payments over that period — more than the employee would collect."


    now, as the employer, are you going to want to take a potential 16k hit over each fire? of course not.


    the reality for most firms is that:


    future backlog is highly fluid right now. projecting more than 6 months out is difficult at best.

    there's a lot of work that has a 3-6 month term on it, but that's it. 

    the laws governing short term hires are....well....fairly non-existent in the states. 


    what this article touches on is the hit an employer can take for doing the 'right thing'. and if you're a small firm, those kinds of numbers aren't inconsequential. especially if you just need a 6 month hire. 


    so, i'm not smart enough to project a way out of the dilemma. any thoughts?




    • elaz

      I, for one, think we're seeing here is the system working correctly. Companies that have a hire and fire mentality are penalized and those with low turnover are rewarded. If you don't feel that you can commit to holding an employee for more than 6 months then you shouldn't advertise the position as long term. It's perfectly legal to hire contract workers - so why not do so until your company is in a more stable position?

      Oct 23, 11 8:12 am  · 

      poche - it's not that simple for everyone. 'contract' employees, by definition, have a type of autonomy a lot of employers would chafe under (but seem to put out there anyways). most prospective employees, quite frankly, want the kind of security being on the payroll represents, especially if they're back out on the street after such a short period of time. 


      so, yes, it does reward lower turnover (which i think most great firms aspire to), but it does seem like there's a niche for something that would serve short term hires that's between being on contract or being a full time employee.

      Oct 23, 11 8:13 pm  · 

      you could "hire" through a temp agency?

      Oct 27, 11 10:14 pm  · 

      Block this user

      Are you sure you want to block this user and hide all related comments throughout the site?

    • Back to Entry List...
  • ×Search in:

About this Blog

Central to the blog is a long running interest in how we construct practices that enable and promote the kind of work we are all most interested in. From how firms are run, structured, and constructed, the main focus will be on exploring, expanding and demystifying how firms operate. I’ll be interviewing different practices – from startups to nationally recognized firms, bringing to print at least one a month. Our focus will be connecting Archinect readers with the business of practice.

Authored by:

Recent Entries