Almost half of the executives surveyed in a recent survey by Deloitte expect to increase the number of contingent workers in the next 5-years. Contingent workers are defined as ‘freelancers or those independent contractors, consultants, or other outsourced, temporary workers who are hired on a per-project basis. They can work on site or remotely or on-site (HCM Works).’
These are the people that make up the so-called ‘gig economy.’ Indeed, in the US, one in three workers fall into this category, as changes in legislation have made it easier to obtain healthcare and save for retirement. There are advantages for both parties; companies can bring in people when there is the demand and workers often receive financial benefit, driven by high day rates.
The trend to increase the number of contingent workers was brought home when visiting the offices of a large Global company recently. Listening in meetings it was apparent that there was a mix of permanent and contingent workers right across the key projects in the company. Not only had they brought in contract workers with specialist knowledge to supplement their training for a large change initiative, they had also employed short-term technical resources to get the project over the line.
Although contingent works can provide companies with a lot of benefits, there are very clear challenges as well. For example, how do you identify the best mix of permanent and contingent workers? How do you recruit and source contractors and freelancers? How do you make sure they work effectively alongside full-time staff and are motivated and produce a high quality of work to the company standard? How do you administer these workers when most will not have records in the HR system?
Here are eight steps that companies should think about to improve the return they get from contingent workers:
- Proactively plan in detail resource requirements and the skills and experience that will be needed, accepting that the existing permanent workforce will often need supplementing. Always do detailed resource plans at the start of a new project or change initiative. Be clear also about how peaks in demand for your day-to-day service offering are going to be covered
- Identify how you are going to recruit the number of contingent workers that are required. Often these workers will have specialist skills and the company’s traditional recruitment sources may not be appropriate. Moreover, think about the selection process. How will the skills and experience of workers be verified? How will you take proper references if the worker has had numerous short-term contracts?
- Protect yourself in case things go wrong. Before a contingent worker is taken on, ask for copies of all relevant documentation. For example, is personal liability insurance needed or details of their own company registration? Also, make sure the contract in place is comprehensive; what are the deliverables for the work, how will the delivery and quality of work be verified and what will happen in the case of early termination of the contract?
- Have proper processes in place to approve timesheets, cross-check invoices and provide prompt payment. Any difficulties in these areas will cause extra work and possible reputational damage in the contingent worker market
- Provide an induction to the company and the project. As with permanent staff, contingent workers will not only provide more value if they have a good induction, it will save time further down the line. Things to cover are company values and culture, details of the project they are working on, the methods and standards that need to be adhered to as well as day-to-day matters such as how to complete timesheets and invoice for fees
- Monitor progress on a regular basis. Assign a project manager or other resource to regularly check that the deliverables the contingent worker is preparing are up to standard and on time. Give feedback on how they are fitting in with the team and what the client thinks. If the contract is for an extended period, say over 6-months, consider bringing the contingent worker into the company’s performance appraisal scheme
- At the end of each contract complete a lessons learnt and be frank on both sides about what has gone well and what can be improved in the future
- Maintain contact after the assignment. Many companies have associate networks where they have regular social events with contractors or they have communications in place, such as a quarterly newsletter or email.