Increasingly, organisations are harnessing the talents of contractors and temporary employees to augment their current workforce, respond to rising talent demands, staff large strategic projects, add new skills and expertise to their teams and accelerate growth.
The rising trend of contract labor is a global phenomenon. According to an Oxford Economics survey, 83% of executives reported an increase in the usage of contract labor to meet business objectives. What’s more, according to an industry trends report, up to 30% of the Fortune 100 workforce works on a contract basis. That number is expected to increase to 50% by the year 2020.
It is not just organisations getting in on the contractor market, more and more professionals are opting to work as “free agents”. According to a survey conducted by Upwork, 63% of all independent contractors say they have chosen to freelance as a first option.
While leveraging the skills of a contract workforce provides many significant benefits, such as lower tax burdens and increased workforce agility, improper management of a contract employee can potentially negate many of the upsides.
So, how can managers provide effective leadership and guidance to contract workers under their charge without incurring compliance risk? How can managers successfully integrate contract workers into their teams? What should managers consider when selecting optimal approaches and tactics for recognising the contributions of their contract workforce? How can your organisation be more inclusive of all labor types?
While there are many types of contract employees, freelancers, SOWs, consultants, temporary employees and contingent workers in a multitude of work environments, in this article, we focus on the management of contract workers in an office setting.
Attracting and Engaging Your Contract Workforce
Behavioral scientist Dr. Ashley Whillans from the Harvard Business School, who researches what makes people happy in the workplace, summarised the power of engagement succinctly: “Cash matters in people’s lives, but it’s not all that matters,” said Whillans. “What really matters in the workplace is helping employees feel appreciated.” This sentiment is especially important to the next generations entering the workforce—Millenials and Gen Z—value this over money.
An Aberdeen study found that 74% of respondents who chose temporary employment cited lack of employer engagement as the driving reason for not renewing their contract.
To get the best from your contract workforce, your organisation needs to treat contract workers with the same respect and appreciation you give to your full-time employees.
Build a Contractor Talent Pipeline
Talent pipelining is critical to improving the recruitment process; even more so when hiring contractors, who are always on the lookout for their next opportunity. Talent communities are a great way to populate an effective pipeline.
Contractors should be frequently encouraged to join your talent community through social media, on your organisation’s career site and in an email via targeted campaigns. Remember, you are not trying to build just a talent pool, but a community, so relationship building and engaging candidates are crucial.
Use this platform to your advantage by interacting and engaging with contractor talent, providing information about current job openings, company happenings and industry news, and sharing branded content that is relevant and beneficial. Capturing data on your talent community based on job interests, industry experience, skill level and basic demographics will help tailor your approach.
Improve the Contract Candidate Experience
Because of the nature of their employment, contractors are always on the lookout for new or better assignments. As a result, a contractor may review multiple opportunities a day, this makes improving and optimising the candidate experience vitally important.
Stand out by explaining what makes the job worth their time, and why they should apply. This will make it easier for them to quickly assess whether the opportunity is a good fit for them and if so, motivate them to toss their hat in the ring. For example, job postings for temporary positions should be more precise and to the point. Try not to include a long list of rigid experience qualifications and responsibilities.
Giving candidates visibility into your work culture through the sourcing and interview process is also key. Ultimately, candidates are making a decision based on personality fits more and more. The more you can share how the role supports the overall improvement of your organisation is also key. Candidates want to feel like they can make an impact and affect change within the organisation they work in.
Contractors’ hiring experience can be very different from full-time employees. Therefore, don’t use the same process to recruit and onboard them. Instead, develop and employ a consistent onboarding process designed solely for contract workers.
Once you select a contractor you need to make sure that they are properly engaged from the start. Ideas to engage contract workers once they are hired should include incentive programs, benefits packages if applicable and accrued paid time off for long-term contracts.
Do not just assume a high turnover for a contract employee, as many contractors opt to renew their contracts or work seasonally for organisations during peak times. Contractors may also be looking for more permanent employment, so clearly highlight any full-time opportunities that are available once a contract has ended.
Integrating a Contract Employee into Your Team
For your contract workforce to be effective, your leadership should go above and beyond to ensure that members feel welcome and are properly integrated into the larger organisational culture. Workers hiring status should not preclude them from feeling like they are a part of the team. In other words, make sure all your contract workers know that they are valued contributors rather than hired guns.
What’s more, treating a contract employee like “a second class citizen” can result in bad morale, not just with your contractors, but also your permanent workforce who must work beside them. Depending on how contractors are used, organisations can find a myriad of ways to welcome them into the corporate culture while treating them differently from permanent employees. But concern about a contractor being offended by being treated differently should not override the need to observe differences for compliance and liability reasons. Co-employment risk is less about exclusivity and more about ensuring fair treatment for all workers.
Establishing good communication is the key to maintaining strong relationships between contractors and employers. Research from Gartner shows that 70% of business mistakes are due to poor communication.
The first step in establishing good communication is letting your contracted team members know that you are always available to answer questions and address concerns.
You should hold regular meetings with members of your contract staff to stay updated about the progress and obstacles they might be facing on projects. You can also assign each contractor a point person they can go to when questions arise, or they are unclear about their assignment.
Video calls, chat messages and emails are all great ways to keep in touch—especially if the worker is remote—but do not rely too heavily on technology to communicate; just like with your full-time employees, contractors workers like to have personal and face-to-face communications with their employer.
Onboarding a Contract Employee
Walking into an unfamiliar office, parsing out the dos and don’ts of a new workplace, and locating the restrooms and water coolers can be daunting on the first day of a new job. So imagine a contractor who may have to go through this process multiple times a year, as they move from assignment to assignment. This is where providing a seamless onboarding process to contract hires can help reduce the stress related to starting a new assignment and establish trust and comfort from day one.
During the contractor employee onboarding process, make sure you have everything prepared on a worker’s first day. Security badges, equipment, office supplies and access to the information required to navigate projects should all be ready to go once they enter the door.
While the onboarding process for contractors will and should look different from an administrative perspective, it should be an equally positive experience. A good onboarding process will increase a contactors tenure, with 69% of employees more likely to stay with an organisation for three years if they experienced great onboarding according to SHRM. Every employee, once onboarded, should feel as much a part of the team as anyone. Doing so will promote trust in the workplace and will ultimately lead to more creativity and more production across the board.
Workers—regardless of employment status—are more effective and productive when they have strong relationships with their colleagues. According to research conducted by Gallup, employees with who report having a best friend at work constantly perform better than employees without similar connections.
When workers respect and view their colleagues as friends, they are more likely to value each other’s input and ideas and may feel more comfortable sharing their own. This mutual respect and comradery lead to better teamwork and the development of solutions based on the collective insight, wisdom and creativity of the whole team.
Early on in an assignment, introduce your contractors to each other and their full-time counterparts. During the initial meeting, encourage everyone to share their background, experience, personal achievements and interests. This can help build rapport and engender greater trust and cooperation.
Tracking and Supervising Projects Assigned to a Contract Employee
Managers who oversee contract employees do so without a formal supervisor-employee hierarchical relationship. They can specify what projects need to be done and when they need to be completed. However, they cannot dictate the specific hours that contractors work or exactly how they are to perform the work. So, to effectively manage projects assigned to a contract employee, managers need to employ a more hands-off supervisory approach.
Define your Goals, Expectations and Timelines with Your Contract Employee
Before assigning a project or task, you should discuss the goals of the project, their roles in it and what you expect from them. You can avoid future confusion about when they should complete tasks by sketching out a clear timeline of when the project starts when they should report on the progress and when they have to turnover in the final product.
Check-in Regularly with Contract Employees
A good way of checking up on project status is to schedule intermittent check-ins with your contract employees to gauge progress toward goals and objectives. While checking-in, try not to explicitly direct your contract employee’s actions, as this may infringe on their feeling of autonomy and make them feel as if they are being managed rather than being engaged as an independent project-based worker. Think of it as managing for results rather than specific activities.
Evaluate and Review
Just like your permanent employees, contract workers need constructive feedback to improve on their skills. When a contractor submits a task, evaluate it right away and provide speedy feedback. This will not just help them review their work, but you can also check on whether the project and you assigned the worker is on the right track or if it needs a course correction.
As more and more professionals are choosing to make their living working as contract employees, the contractor workforce is becoming a bigger part of the labor mix, developing a best practice management strategy attracting and retaining them critical to organisational growth.
Forward-thinking organisations are providing contracted help with a greater say in the work they do; they’re connecting them with teammates and they’re recognising them for their contributions. In other words, they’re positioning themselves to become employers of choice for contractors.