Solutions to Workforce Retirement Shortages

04/21/2008

Paul Munnis


While it’s not a panacea for the looming worker shortage many jobs can be redefined so that they can be done from home by retirees acting as 1099 independent contractors.

1099 workers are independent professionals under contract, not regular employees. “1099 worker” comes from a US tax form 1099. It's used by the US Internal Revenue Service to report income other than wages, salaries, and tips. However, the form has become famous for reporting amounts paid to independent contractors. The IRS likes to call these payments “non-employee compensation”. Under US tax law, companies have to submit a Form 1099 for every contractor paid more than $600 that year. If you want to become a consultant or you hire consultants, take the time to read through 1099 worker rules.

With today’s Internet services including Skype, video conferencing, remote surveillance via web cam, text messaging, e-Mail, and a host of other technologies, much work can be done from home on a contract basis. If the worker is able and skilled few people care about their age.

Note that 1099 workers can also come into the office when needed and they can meet in person with fellow workers and managers. Companies like IBM have long permitted this sort of employment for many kinds of jobs and it has worked out well for both parties. In fact many IBM salesman have no office. They are home based, travel as needed, meet over the Internet, close their sales successfully, and work independently. They are paid for results not for showing up at the office. Most are IBM employees however working on an "At Home," agreement.

They are not alone. Take a trip to almost any coffee shop equipped with wi-fi today and you will see the road warriors sipping coffee and working on their laptop and using their cell phones to communicate with both clients and managers. Some coffee shop owners joke that they need to charge the road warrior for office space. Another place they can be found is at a Kinko’s which has desk space and copiers and printing services and Internet, all available on-site.

Not all homes are conducive to working from home and so a business that has an empty set of offices with a PBX unit, copiers, and conference rooms, could lease office space to 1099 workers. Clients could rent by the day, week, or month, or year with appropriate rates for each period of use.

As America has ramped down their manufacturing operations the workforce has been moving to sales, service, customer help, order fulfillment, and a host of other Knowlege-worker jobs that can be done over a network. With a little effort at job redesign the same people can retire then form a 1099 company, and then continue to work as independent contractors but at higher income levels and be home based or use other work arrangements. No need to spend $4 gas to commute to work, just work from home and when you visit a client bill them for the gasoline used in travel as a part of the minimum service fee or even get it written into the job contract. The company that hires you obtains the customer’s -- that’s their job.

The key to redefining these jobs are in terms of setting measurable criteria for work assigned. If the contract calls for data entry of medical data then the amount to be accomplished by week should be stipulated in the contract.

Doing this can actually raise productivity of the workforce while permitting a more relaxed transition to retirement and a more laid back environment to get the work done.

Electricians and plumbers can provide their own tools and parts, can be dispatched from home, and can show up to do client work even though they don’t go into the workplace each day. They can take jobs from an Internet job pool and accomplish them and if they want a day off take it, just don’t dip into the job pool that day and make a commitment.

New companies can form to engage these workers and handle all of the paperwork and customer communications and the profits from a job can be split on some negotiated basis. Human resources people can work from home, many managers can too, sales can be made home based, and service workers can be summoned as the need arises and retailers can be employed on a demand basis to supplement the regular workforce.

Even retail stores in need of workers can enter into a 1099 arrangement and staff according to records of traffic levels. On slow days less people come in to work, on busy days more workers are summoned. They are paid as independent workers.

Doing this sort of work redesign can benefit all parties if it is done with skill and what is more home based workers can be assigned to attend training workshops as needed and paid for their attendance to classes.

The future needs to be gloomy only if we let it be that way. It is possible to create a win-win situation for all parties and at the same time provide retirees with a supplemental income.

In the meantime, some jobs that are not so good can be permitted to go offshore for it will be too costly to staff them from a reduced labor pool. Companies will still need knowledge workers to meet with and work for them and for their clients.

To read more about 1099 independent contracting click HERE.