It’s a good time to be a contract worker. According to Fortune, in 2020, contract work grew by 33 percent, and independent workers’ wages increased by a similar rate. Freelancing was growing rapidly even before COVID. The pandemic has accelerated the trend. Employers are investing in lower risk talent and workers are craving more flexibility and control in their careers.
Considerations for contract workers
The IRS asks employers to consider the following factors when legally determining whether or not a person is an independent worker.
- Behavioral: Who has the right to control how the worker does their job? Employers direct only the outcomes of work, not the processes behind those results.
- Financial: Who manages the business aspects of the worker’s job such as how the worker is paid, office resources, and expense reimbursement? Employers do not set such detailed guidelines for independent workers.
- Type of Relationship: Does a contract define the scope of the individual’s work, and does the employer provide benefits like insurance and vacation? Typically, independent workers require contracts and do not receive traditional benefits.
In general, independent workers cost employers less than traditional employees who receive salary and bonuses, benefits, payroll taxes, and training. Their work is also more scalable. The downside to working with contractors is that they tend to be less loyal to an employer and less interested in a long-term relationship.
How to better engage contractors
Have you seen a recent spike in the number of contract workers your organization has hired? Perhaps you’ve played a key role ushering these individuals into your employee base. Today talent complexities abound due to the Great Resignation and a growing gig workforce. It pays to invest in your contract workers, so they are more likely to stick around. Here’s how.
Connect them to your mission.
Orient contract workers to your organization’s mission, vision, and values. If you cannot afford to take them through a complete onboarding program, present your company history, charter, and business goals. Explain how the work they are doing contributes to these key priorities. Show independent workers how they add value, both upfront and throughout their term. Additionally, describe additional projects they can pick up after their current contract ends, so they understand you would like to continue working with them.
Often independent workers are omitted from staff communications. If your contractors don’t hear from you regularly, they are more likely to disengage. Establish several communication channels like Teams or Slack chats, email, and Zoom to relay important company information so they stay in the loop. Also, schedule weekly check-ins to share helpful feedback or updates.
Get to know them personally.
Many of the new rules for hybrid workforce engagement apply to contractors. For example, prioritize social connection to build a relationship. Carve out at least five minutes of your weekly check-in to allow individuals to share exciting—or challenging—news about their personal lives. Show contractors you care about them as human beings. If they feel safe while working for you, they will be more willing to continue the relationship. Finally, face-to-face interactions help to build interpersonal engagement, so make it a point to meet independent workers in person.
The Bottom Line on Contract Workers
Prior to the pandemic it was estimated that by 2023, more than half of the workforce will have worked or will be working independently. Contract workers will dominate most companies’ future talent plans. Brighter Strategies partners with dozens of organizations to equip their leaders with a map forward, and to ensure all of their people—traditional and independent—are working to their fullest potential. Contact us today to learn more.
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