How to Build a Contractor Management Program: 5 Questions to Ask

Contingent workers are a steady economic force, bringing in-demand skills, staffing flexibility, and cost control to many enterprises worldwide.  As more businesses incorporate independent talent into their workforce strategies, building an effective contractor management program has become increasingly important. A centralized program can help organizations efficiently engage independent contractors while improving compliance, visibility, and the contractor experience. 

Why Build an Independent Contractor Management Program? 

An independent contractor management program provides a consistent framework for sourcing, engaging, managing, paying, and re-engaging independent talent. In order for businesses to meet their goals of bringing independent talent on board—reducing enterprise manger time, streamlining processes, minimizing misclassification risk, and lowering costs—it is important to ensure the right engagement practices are in place. While there are many related best practices to engaging independent contractors such as direct sourcing and correctly classifying workers, all of these individual systems must be combined to minimize compliance risk, increase worker satisfaction, and attract top talent.

A centralized contractor management program encompasses the entire independent contractor lifecycle, from sourcing and engagement to payment, management, and re-engagement. Whether you’re building a new independent contractor engagement program or simply modifying existing practices, ask the following questions to create a strong and long-lasting foundation for your program.

5 Questions to Ask When Building a Contractor Management  Program

1. Are executives on board?

Executive buy-in is essential to building a successful contractor management program because leadership support helps secure resources, align stakeholders, and drive adoption across the organization.

These key people should understand the value of a program and be willing to champion it among key managers—the people who need and will be engaging independent talent.

To obtain buy-in, be sure to build a strong business case for your program, research the potential return on investment, define clear goals, and incorporate leadership, as well as their feedback, in the process of program design.

2.  What Independent Contractor Policies Are Already in Place? 

Reviewing existing independent contractor policies helps identify compliance gaps, inconsistent processes, and opportunities for improvement before building or expanding a contractor management program.

Are there worker classification processes? If so, are they compliant with federal, state, and local laws? If your company currently engages independent contractors, look to see if there are contracts on file and what information they include. Assessing gaps and areas for improvement in your own practices will help you zone in on what needs to be changed and what needs to be created when building the new program.

3.  What Technology Will Support the Contractor Management Program? 

Contractor management technology can help organizations streamline how they source, engage, manage, and re-engage independent talent. Technology often takes the form of a freelance marketplace or other platform that helps managers engage or manage independent workers. With a freelance marketplace, companies can post available opportunities, review top independent talent that matches the skills they are looking for, and efficiently engage the talent they want compliantly.

4.  How Will We Attract and Retain High-Quality Independent Talent? 

Retaining high-quality independent talent requires creating a positive contractor experience that makes skilled professionals want to work with your organization again. This is especially important because independent professionals have a lot of choice when it comes to picking the clients they work with. That means that it’s up to enterprises to structure policies, procedures, and interactions in a way that aligns with the needs and desires of independents. Some of these best practices include: treating independents as part of the team, letting them know their work is valued, creating a positive work environment, and building in quick and fair compensation terms.

5. How will the program be rolled out?

A successful contractor management program rollout requires a clear implementation plan, stakeholder communication, employee education, and ongoing support for internal adoption.

Are there any potential risks or concerns that might prevent your program from being successfully rolled out? Take a look at existing hiring processes and talk to current managers about their concerns. With these conversations in mind, preemptively build in solutions to potential push-backs. Educate employees on program policies and procedures well before program roll-out so they know what to expect and can get their questions answered.

Lastly, be sure to keep lines of communications open. Keep staff up-to-date on how the program is doing and publicize specific success stories. Good communication is a great basis to maintain internal commitment; encourage feedback and don’t be afraid to let the program grow and evolve as company goals and priorities shift.

Frequently Asked Questions About Contractor Management Programs

What is a contractor management program?
A contractor management program is a structured approach to sourcing, engaging, managing, paying, and re-engaging independent contractors. A centralized program can help organizations create consistent processes, improve visibility, and reduce compliance risk.

Why do companies need a contractor management program?
Companies use contractor management programs to create consistent processes for engaging independent talent, manage compliance risk, improve efficiency, and provide a better experience for independent contractors and internal managers.

What should a contractor management program include?
A contractor management program should address independent contractor sourcing, classification and compliance, contracts, engagement, payment, management, re-engagement, technology, and internal program governance.

How do you build a successful contractor management program?
Start by securing executive support, reviewing existing independent contractor policies, identifying the technology needed to support the program, developing a strategy for attracting and retaining talent, and creating a clear rollout and adoption plan.

How can a contractor management program reduce compliance risk?
A centralized program can reduce compliance risk by establishing consistent processes for worker classification, contracts, engagement practices, documentation, and ongoing contractor management.

Building a successful contractor management program requires more than simply putting individual processes in place. By aligning leadership, compliance policies, technology, talent strategy, and internal adoption, organizations can create a scalable approach to engaging independent talent while reducing risk and improving the contractor experience. 

 MBO Partners can help you evaluate your current independent contractor program and build an engagement strategy that supports your workforce goals.