The Expert Edge

5 Ways the Small Business Jobs Act May Benefit Consultants

This week, President Barack Obama signed a bill to help small businesses expand and create jobs by cutting their taxes and establishing a $30 billion loan fund.

San Francisco Management Group consultant Jim Lansing, who heads up PATCA's Legislative Committee, has been investigating the story. Based on early research, Lansing has identified some "quick hits" that pertain directly to consultants, most of whom run small businesses.

Five ways this legislation may benefit consultants, directly or indirectly:

• Small businesses will be in a better position to hire consultants. Since these firms are likely to be cautious in the short term, they may hire part time employees and outside consultants for an interim period before adding permanent headcount.
• Greater funding sources will be available as options for management consultants who help clients package and obtain financing, allowing for more organizational consulting projects to proceed.
• Construction firms and other small business manufacturers will be able to make essential equipment purchases and qualify for a tax write-off more quickly. 
• The elimination of capital gains taxes on  many small business equipment purchases should eventually make more funds available to hire additional employees or project consultants.
• The new law provides that self-employed Americans can deduct all health insurance costs for themselves and their families. Previously, consultants could only deduct 50% of such costs.

Watch this space for continuing commentary on how the Small Business Jobs Act will affect consultants, self-employed specialists, and small businesses.

Submitted by Jim Lansing.

Rutgers Study Shows 40% of NY Contract Workers Have Trouble Getting Paid.

Crain's New York published some very interesting findings from a Rutgers University Study on NY freelancers. Reprinting some excerpts here, and we're very interested in sparking some commentary from PATCA. Your thoughts?

Author Daniel Massey writes:

"...The seemingly simple process of getting paid has emerged as the No. 1 problem facing self-employed workers. A first-ever study by a Rutgers University economist shows that 42% of the nearly 900,000 independent workers in New York state reported having trouble collecting payment for their labors last year, totaling an estimated $4.7 billion in lost wages."

"...More than 400 freelancers have electronically “outed” clients they say have not paid them—ranging from political candidates to banks to media companies—via a website set up by the Freelancers Union."

"...And a legislative push in Albany seeks to provide independent contractors—the fastest growing segment of the economy—with the same rights as traditional employees. Nationwide, half of all the new jobs added in the recovery are expected to be independent workers, according to the employment law firm Littler Mendelson."

Skills Matter in Today’s Marketplace

A recent Harvard Business Review article entitled, “Higher Education Is Overrated; Skills Aren't” includes several common sense explanations for the title’s premise that “great knowledge doesn't confer great skill.”  The points made are equally important and relevant for consultants, job seekers, and small or large companies who are trying to land a new client engagement or a new job.

The article states, “While higher education itself isn't marginal or unimportant, its actual market impact on employment prospects may be wildly misunderstood. In ‘Econ 101’ terms for job-hunters: time spent cultivating your Facebook / Linked-In network(s) may be a better investment than taking that Finance elective.”

Adapting to new ways of finding and cultivating connections has value for consultants in all fields when we consider that the best sources of new clients have always been through our various referral networks. Today, those networking contacts are often found online and maintained through emails and social networking sites.

For consultants, linking to blogs, published articles, PowerPoint presentations, podcasts and webinars will help create an impression of "purported knowledge" that goes beyond their own websites and social networking.However, long-time consultants know that their “purported knowledge” matters less than demonstrating what has been done successfully for other clients.

This “vast structural shift in the human capital marketplace” has made clients much more selective in hiring consultants. According to the HBR, proven skills, the distinctions between them, and their value in landing a new assignment “aren't subtle; they're immense.”

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Contributed by PATCA member Carole Edman, of HR Manager to Go.