With the changing employment landscape, many businesses are looking to contractors and freelancers as a viable option to address worker shortages.
The upside to contractors versus employees is professional work for hire with no source deductions or benefits costs for the employer. Agreements are easy to terminate if the relationship doesn’t work out and performance expectations are results-based and don’t need to be managed in the same way as with employees.
Contractors tend to get things done more quickly and are focused on specific tasks and projects, versus carrying an additional workload. The downside is that compensation is often higher (although factoring in savings around deductions and benefits brings it closer in line), and it can be more difficult to integrate contractors into your team and culture than it is with employees.
If you’re considering engaging contractors or freelancers as part of your workforce, there are some things you should think about. It can be a great move for your business if you do it right, but there are risks and potential challenges if you don’t. Here are some things to think about.
1. Treat it like recruitment
Just as you would in hiring an employee, put a process in place for assessing contractor candidates and their fit for your organization. Just because your neighbour or a business associate loves working with Joe doesn’t mean Joe’s skills, experience, personality or values fit with your company.
Ask for a CV and references to see the kinds of projects they’ve done and get feedback on their work. Conduct interviews to determine whether they will not only deliver on expectations, but that their work style and ethos matches yours and the people they’ll be working with.
2. Insist on a signed agreement
Even if you have a great feeling about someone you want to bring on board, and even if that person has stellar references, you need to have a contract that clearly lays out expectations. Far too often, “handshake” engagements without concrete, written expectations are based on assumptions by both parties and can lead to trouble.
Most independent contractors will have agreements or contracts they use when signing on with a company, but if they don’t, make sure you build one before bringing them on board. This should include:
Scope of the project or work: What, specifically, will they be doing and expectations around quality and work standards.
Authority: How much they can do without consultation.
Feedback: Regular meetings with a project manager or liaison to ensure course corrections can be made in a timely manner if necessary.
Timelines: Internal and external deadlines.
Reporting structure: Who they will report to and who else they will work with.
Budgets: How much money they can or can’t spend, and on what.
Fee structure: How they will be paid, and when and how that will occur.
Client interactions: When will they engage with clients and what are the expectations around those interactions.
Subcontractors: Whether they are allowed to subcontract work within the scope you have identified.
Termination: Rules around how the contract can be terminated — typically with 30 days written notice on either side — and what payout looks like.
Availability: How many hours per week and the times of day they will be working for you; you don’t want to be surprised to discover they are working for you evenings and weekends and unavailable to the rest of your team during the workday.
In addition, there should be clear and concise clauses around confidentiality and non-disclosure. This contract will be your guide as you move through your work together and provide a place to return for clarity to ensure things go smoothly.
3. Create clear culture expectations
Communicate your company’s culture and values and your expectations for the contractor to uphold those with your team. Providing opportunities for them to get to know team members, especially ones they will be working closely with, will create a foundation for successful, respectful work relationships.
Contractors who remain on the outside of the organization can leave employees feeling distrustful, resentful and unwilling to engage. This can cause projects to stall, create inefficiencies and delay or damage outcomes.
4. Prioritize communication
It can be tempting to hire a contractor and assume you can set them on stun and ignore them until the work is done. They are professionals after all; you shouldn’t have to babysit them, right?
They are professionals, but abdicating your responsibility to provide clear communication and regular check-ins can result in assumptions that derail project expectations, take things in an entirely wrong direction, or create a void where the contractor makes decisions that aren’t theirs to make.
Creating a clear communication plan, which includes regular one-on-ones with their project manager and other team members involved, will ensure everyone is on the same page and you won’t find yourself reeling in a project that has gone off the rails.
These four strategies will set the foundation for an excellent, clear working relationship and ensure the money you are spending is creating the outcomes you want.
Hiring a contractor can be a great way to expand your team within the ebb and flow of your company’s workflow. It can also add a level of professionalism and effectiveness to your projects and benefit from the experience of multi-faceted career professionals. Taking steps to create a strong framework before the work begins will ensure the experience will be positive for you and your team and will generate the outcomes to help you grow your business.
The don’ts of hiring Contractors
Don’t make a desperate hire
No matter how badly you need the work done, don’t bring someone on without going through the appropriate steps and considerations. With employees and contractors, desperate hires rarely work out.
Don’t ignore onboarding
Contractors need an onboarding strategy as robust as employees. They should understand your company’s vision, values, logistics and where to access information. They should also meet the team and have access to examples of the kind of work you expect them to produce. This not only contributes to a stronger understanding of your company, but also builds relationships that foster connection to your culture.
Don’t assume anything, ever
Keep the lines of communication open. Check in. Provide feedback. Get their feedback on how things are going. Check in on all aspects of the work. Don’t wait to revisit the agreement if you feel things are going sideways. Because contractors aren’t being supervised like employees, ensuring you have a pulse on their work will avoid pitfalls based on misunderstanding and misdirection.
This may feel like the opposite of “don’t assume anything,” but it’s not. Working with contractors is a constant balance between managing the overall project in an effective and collaborative way and trusting in their professionalism and experience to do the job they were hired to do.
Ingrid Vaughan, principal of My Smart HR and founder of the Smart Leadership Academy, provides HR support and leadership coaching to small business owners and managers.