Once you have identified and hired an independent contractor, ensuring a successful engagement is the next important step. Managing an independent worker is significantly different than supervising traditional W-2 employees.
Independent contractors have the freedom to control their hours of work, and the manner in which they accomplish the agreed upon project. In fact, a common litmus test to determine whether or not someone can be classified as an independent worker is control. While it is important to manage contractors differently, you can still help to ensure they are productive and working towards a mutually successful outcome.
Traditional W-2 employees have job descriptions that define their responsibilities. You can use these responsibilities to set boundaries and provide guidelines for measuring performance. When engaging independent contractors, however, the scope of work (SOW) outlines the project or job to be done.
The SOW provides a foundation for a good working relationship. In addition to defining the project you’d like done, it includes a timeframe and payment terms. Before the project starts, work with your independent contractor to develop a clear SOW. Include a process for managing changes to the project, budget, and timeline. Inevitably, things will veer from the plan and defining a process up front will save you time when road bumps occur.
Before the project begins, establish a process for communicating progress. Will there be weekly phone calls or progress reports? Consistent communication ensures that issues are quickly resolved and that you and your contractor are aligned on goals and expectations. Setting up regular check-ins or reports can help keep your project on track.
If there are multiple departments or business units involved in the project, designate a single point of contact for the contractor. This will help your contractor avoid delays in the case they have to wait for reviews and approvals from multiple parties.
To best facilitate communication, consider using a shared workspace such as Basecamp, or a folder on your VPN. Talk with your independent contractor prior to the project to establish what will work best for both of you; the contractor may be able to recommend a system they already have in place for shared communication and document collaboration.
Setting measurements and milestones can help keep your project moving smoothly from start to finish. First, define success measures. While you may want the work completed in a specific amount of time for the agreed upon budget, there are other ways to define success. Make sure the metrics you choose are accessible, relevant, and timely.
Setting clear milestones a second important step. A milestone provides your contractor with a defined target and ensures that they are making consistent progress towards the goals you set. If you want to track milestones, consider using a shared calendar through your internal systems, project management software, or calendar tools such as Google Calendar.
When working with independent contractors, you are managing a business relationship—not an employer-employee relationship. You do not account for the hours they work in the day, but you can measure their performance by product they produce, the interactions they have with you and with your team, and how they manage the project.
Rather than reinventing the wheel with each new engagement, develop a standard process for engaging and managing independent contractors. A defined process will help hiring mangers adopt a uniform approach to measuring performance. You’ll also be able to identify your most successful contractors to create a virtual bench of talent that can be leveraged for future opportunities.
As we conclude our Human Capital Market independent talent series, we look at the third and final dimension: management.
Learn about the complex risks and benefits to co-employment, and best practices for engaging independent contractors.