The legal risks associated with hiring independent talent are a common topic in business media. There are resources available for enterprises to tap in order to ensure that the engagement of independent contractors is in compliance. But even though you may understand when to classify workers as independent contractors and how to avoid common misclassification mistakes, there is another significant risk to consider in attracting and engaging independents: Loss.
The Enterprise Cost of Lost Independent Talent
While talent loss will not put your enterprise on the wrong side of legal or regulatory requirements, it can still have a negative impact on the company. High-demand, hard-to-find skills can go out the door. Projects can be disrupted due to the departure of key team members. Your talent acquisition and procurement teams must manage churn in your independent talent pool as new contractors must be engaged to replace departed ones. The benefits that attend a contractor pool with a long history of work in the enterprise are lost.
Why Independent Talent Loss Can Occur
There are various reasons for independent talent losses, including:
- Lack of cultural alignment with the company and/or the team
- Low project or role appeal
- Unclear communication about the role and deliverables
- Perceived commoditization of the role and work
- No opportunities to upskill during contract work
One or more of these can prevent a contractor from forming a mutually beneficial bond with the team and company. There is no deep commitment, and they are likely to look upon their current work as just one project to be completed before moving on to the next client.
How to Avoid Independent Talent Loss
Here are three ways to mitigate the risk of loss of valued independent talent, ordered in terms of the time and resources needed, from least to most.
Remember that Independent Professionals Are Business Owners
The first step in avoiding losing valued independent talent is recognizing that these workers are themselves business owners. While there may be some overlap with employees in terms of viewpoints and goals, their perspectives are fundamentally different. Our 2022 State of Independence report revealed that 64% of survey respondents are independent by choice, and 76% indicated that they are happy with their choice. Nearly one in five respondents said they plan to build a larger company. So, while generating sufficient revenue and having a career development plan are goals they have in common with employees, their focus on business growth has a different set of goals. Understanding their priorities can make a big difference in mitigating the risk of independent talent loss.
Proactively Position as a Client of Choice
As more and more companies put independent talent in strategic roles, the need to attract, engage, and retain high-value contractors is of great importance. As competition for these professionals heats up, it is becoming crucial for a company to be a Client of Choice. If your organization is already an Employer of Choice for full-time workers, you have a head start in terms of becoming a Client of Choice. A positive work environment, opportunities for professional growth, and meaningful work are elements of an attractive employment scenario and are also important to independent talent.
Deploy a Direct Sourcing Program
A direct sourcing program focuses on strategically engaging and retaining contractors with high-value skill sets and is the best strategy to mitigate independent talent loss. It directly addresses many of the reasons for loss by creating a supportive talent community that offers independents valuable professional opportunities and benefits. Such an initiative involves several functions in the enterprise working together to design the program and plan its deployment.