A Portable Employer of Record (PER) acts as a service that offers an engagement channel to connect with internally recruited independent contractors within a business. A PER can be described as a traditional office - with the support of departments such as a contracts department, finance group, a human resources department, a payrolling team, benefits managers, collections agents, etc. — that supports an independent contractor as he or she moves from assignment to assignment, or client to client.

Why do Businesses use PERs?

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By engaging independent contractors directly within their organizations, rather than going through staffing companies, businesses can see immediate rewards:

• Cost savings- engaging independent contractors directly can be much less expensive than channeling the same contractors through staffing intermediaries.
• Streamlined services supply chain - businesses can make their services supply chains more efficient by connecting directly with the contingent worker whom businesses commonly use, rather than going through a many-linked chain of consulting companies that serve as sub-contractors to a prime vendor.
• Rapid talent deployment - enables contingent worker recruitment strategies that minimize time-to-productivity by shortening recruitment cycles.
• HR involvement - directly engaging independent contractors more closely resembles full-time personnel engagement and is therefore more appropriate to be handled by HR.
• Security of personnel - eliminating intermediaries and engaging directly helps mitigate the risk of engaging unknown and potentially unwanted personnel.
• Visibility and control - a corporate commitment to direct contractor engagement promotes enterprise-wide consistency of processes, which in turn leads to much improved visibility into services spend.

Why do Independent Contractors use PERs?

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Maintaining a single employer from client to client can provide many benefits to individual consultants:

• Lowering Tax Payments - rather than paying Unemployment and Social Security taxes twice or more each year (which occurs everytime independent contractors start with a new employer), they will only pay once, and they lower these tax payments by reaching their maximum cap off more quickly.
• Uninterrupted Benefits – independent contractors may have the opportunity to gain consistent benefits, like health insurance, by remaining with one employer, rather than by themselves.
• Secure Mortgages and Other Loans - by showing one long-term employer independent contractors will be more credible for loans and mortgages.

External links and resources

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• MyBizOffice
• Human Capital Institute
• W2W Ventures

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