Why It's Time to Invest In Your Most Valuable (Contract) Players

For decades, the corporate attitude towards temporary workers, contractors and independent consultants has focused mostly on cost-cutting and legal compliance. But with the advent of the PPACA causing greater interest in employment flexibility, and an ongoing tight market for specialized skills, companies are starting to realize the true value of high quality contingent workers.

The newest challenge in the near future will become not only attracting and hiring the right full-time employees, but finding and retaining the best contingent workers. Organizations will need to change their outlook and strategies to elicit both quality work and loyalty from their contingent employees. Why?

The use of contingent labor has leaped over the past year alone by more than 12 percent. That number is predicted to rise much higher. Crucial work in more companies is being performed by highly skilled--but not full-time--professionals, like engineers, interactive designers and nurses. Contract and outsourced workers are taking roles where they deliver both customer service and strategic initiatives. It makes sense to engage with those contractors and other "temps" who provide you with excellent work.

Redefining the Relationship

One important component of engaging with top contingent talent involves readjusting attitudes. First and foremost, these employees need to be treated as valued contributors, not as hired help. Yet the unique professional relationship must be recognized: they are not employees. Some call the most successful type of contract relationship an "arms-length embrace." Employers respect the contingent employees' independence, but show them their contributions are valued--by including them in company social gatherings, keeping lines of communication open, recognizing their accomplishments and generally making sure they know their work is important.

Getting What You Pay For

This new way of looking at contingent relationships must also extend to compensation. Employers will need to offer a fair wage rate rather than taking a nickel-and-dime approach to temporary talent.

Of course, there are times and roles where a simple, transactional relationship makes sense, like using assembly-line workers or hiring people to perform a one-time project. But experts say that when contractors are performing crucial work, smart companies will take those relationships seriously and devote time to developing them to keep these people on board.

Defining Contingent

In the current work environment, it's important to define contingent employees properly. Consensus seems to be that the term encompasses workers from temporary agencies, independent contractors, business consultants and employees of large professional services firms. But employers cannot call people temporary workers, contract employees or independent contractors when they actually qualify under the law as employees. Each major labor and employment statute has its own definition of employee and its own way of drawing the line between employees and independent contractors, so employers will have to do their homework to make sure they are using proper classification and adhering to federal standards.

Looking to the Future

One human resources strategic planning analyst foresees a future where companies will consistently engage with the same highly skilled individuals and small groups. Attracting them, vetting their effectiveness and having the good ones back time and again will be crucial.

A key factor will be performance assessment. Currently, most companies track and assess their full-time employees' performance in a formal process, but contingent worker quality control is much less consistent. Mediocre or low quality work can be a threat to an organization, especially if it has a direct impact on customers.

Organizations ought to make contingent labor more central to their strategic workforce planning, says Barry Asin, president of Staffing Industry Analysts. As Asin sees it, firms should "stop setting the contingent part of their workforce to the side."

Finding Solutions

To help organize their contingent workforce, some companies purchase Vendor Management System (VMS) software tools. But these are designed to help manage the use of contingents, not assess the quality of their work. Managed service providers (MSPs) can also oversee your contingent workforce, but assessment is not always a part of their package. And especially with millennials or people in more creative or critical roles, employers may find a higher-touch relationship more valuable.

As much as any contingent worker wants to do a good job, they may suffer from an engagement deficit. Offering in-person feedback and appropriate praise can help fire up their performance. Giving contract workers the "big picture" surrounding their assignments can also help. If employers spell out an isolated set of tasks without a sense of the larger purpose of the work or the project's timeframe, contractors may only do the bare minimum.

Savvy companies that want to optimize use of their contingent employees will learn about their skills, experience and passions to see if there are other ways they might help the organization or see where they might fit in best. Some even develop databases about their in-house talent in order to best match assignments with employees.

It's time to strike a happy medium with contingent workers, who either want to or have to remain independent, but will work better if they have a closer relationship with clients. Giving them a sense of inclusion and showing appreciation will help develop a two-way relationship that can benefit both parties. Professional, productive contingent employees can play a key role in an overall workforce strategy.