Once you have identified and hired an independent contractor, you want to ensure a successful engagement. Managing an independent worker is significantly different than managing traditional W2 employees. Independent workers 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 of being classified as an independent worker is control. While it is important to manage non-employees differently, you can ensure that they are productive and working toward a mutually successful outcome.
Define a clear scope of work
Your traditional W2 employees have job descriptions that define their responsibilities. You use this to set boundaries and provide a guideline for measuring performance. When engaging independent contractors the scope of work (SOW) outlines the project or the job to be done. The scope of work also includes time frame and payment terms. Before the project starts, work with your independent contractor to develop a clear scope of work. The SOW provides a foundation for a good working relationship with the independent contractor. Include a process for managing changes to the project, budget or timeline in the SOW. Inevitably, things do not always go as planned and defining a process up front will save you time during the course of the project.
Commit to Communicate
Before the project begins, establish a process for communicating progress. Will there be weekly phone calls or progress reports? Consistent communication will ensure that issues are quickly resolved and that you and your independent consultant are aligned on goals and expectations. It is a good idea to set up regular check-ins and/or reports to keep the 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 ensure that your contractor is not delayed by endless reviews and approvals from multiple parties.
To facilitate communications, you may consider using a shared workspace, such as Basecamp, Drive or a folder on your VPN. Discuss this prior to project start with your independent contractor as they may have systems in place for shared communications and document collaboration.
Measurements and Milestones
What are the success measures for the project? You may want the project completed within a certain amount of time for the agreed upon budget, but what other ways will you define success? Make sure that metrics are accessible and easily delivered, relevant and timely. For example, if you hired a contractor to create billboard campaigns, you cannot measure the number of people that looked at a billboard, but you can track and measure calls placed from the ad.
Setting clear milestones is as important as choosing what to measure. A milestone provides your contractor with a defined target. It also ensures that your contractor is making consistent progress toward the goals you have set. If you want to track milestones, consider establishing a shared calendar. You can do this through your internal systems, project management software or shared calendar tools such as Kalendi or Google Calendar.
Plan for the Future
When working with independent contractors, you are managing a business relationship rather than an employer-employee relationship. You do not account for the hours they work in a day, but you do measure their performance by the work product, the interactions with you and 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 managers to adopt a uniform approach to measuring performance. It will also help you to identify your most successful independent contractors and create a virtual bench of talent that can be leveraged for future opportunities.
Need to know information for any individuals or companies hoping to engage independent professionals in the 21st Century.
MBO Partners developed a calculator that quantifies what we can: the IRS component of the risk. Our legal team scoured the IRS code and assembled the possible penalties into a single easy-to-use calculator.