In today’s world dominated by small businesses and startups, independent contractors are an integral part of success. From property developers who need on-site workers, web designers, legal consultants, copywriters and temps, the need for freelance staff is higher than ever.
Unlike full-time employees, you don’t worry about paying a regular salary, pension, healthcare, taxes, unemployment insurance and other benefits and taxes. However, there is some confusion as to the guidelines and best practices for hiring an independent contractor. Are the rules different? How do you manage a worker you have no jurisdiction over? What can employers do to keep independent contractors motivated?
7 tips for managing independent contractors
Learn the rules
The first to any working relationship is to know the rules and with independent contractors, employers should know who qualifies as an independent contractor. Management should be hands-off and less supervisory. You can’t stipulate strict hours they have to work or give explicit directions. You manage results and output not specific activities.
Develop and maintain goals and schedules
Property development financiers in the UK always advise new property developers to establish goals and schedules with independent contractors to avoid missed deadlines that occur from poor scheduling. Experts noted that contractors are stifled by close supervision and too much direction. Create a contract, specify goals for the project and provide time frames with interim check-ins. This is also a good framework for performance evaluation.
Build the relationship
While companies are not required to invest in their contract workers, be careful not to fall into the trap of making the business look purely transactional. If you like their work and want to work with them in the future, try to know them personally as you would an employee. Treat contractors as part of your community or they might feel marginalized. Showing care about their personal welfare motivates them to work harder and meet goals ahead of time.
You might not be able to control the process but you can guide productivity. Here are a few steps
Be available for questions that might arise
Schedule regular meetings to view job progress and receive update report. Instead of doing an online follow-up, make an effort towards face-to-face communication. It’s a connection that contractors value.
Integrate them into the team
Integration is a great way to boost an independent contractor’s morale. It creates familiarity with the company’s values and available resources. Contractors want to know that their work makes a direct contribution to your performance. Encourage them with honest feedback, praise and where possible offer a bonus to boost morale. You could invite them to company events and general staff meetings to help them feel like a team member.
Be smart about payment
The best payment method for contractors is to pay them based on achievement of goals or an agreed upon fixed fee instead of hourly payments. You’re not paying them for ongoing work but for job completion, the fee structure should reflect that.
Be careful not to underpay your contract worker especially if the goal is to create a long-term working relationship. It creates resentment and undermines the relationship. For best results, do your own research about the current pay levels for freelance workers in your industry.
Where performance management is concerned, focus on the results. Allow contractors set their working hours except in cases where they have to work in tandem with your clients or employees. Micromanagement is especially tempting for managers working with a contractor for the first time. Trust them to deliver on established goals.
Keep in mind that loyalty isn’t top priority for a freelance worker and your company saves money by using their short-term services. Communicate values, be clear about goals, offer feedback, bonuses and treat them fairly.