How Contract Labor Impacts the Culture of a Company

visualization of co-workers coming together as a whole like a puzzle

Current statistics released by the SIA reveal that 30% of workers (some 44 million Americans) comprise the ranks of the modern contingent labor force.

With so many workers taking on temporary projects or part-time roles, it makes sense that for many organizations, the transient nature of these workers begins to exert influence over company culture. These workers may not demonstrate the same allegiance and loyalty to the brand as their full-time counterparts. The morale of full-time workers may similarly dampen, as they perceive their roles as less secure, with contractors waiting in the wings to do the same work for less.

There are various points in the Contract Lifecycle Management process for demonstrating the values of an organization to contingent workers. Sharing these values with contractors goes a long way toward keeping them engaged and involved. However, before we review contract lifecycle management best practices, we should note that the overall process for engaging the contingent workforce is not just an operational activity. It is, in itself, a part of your culture. So, it is a worthy exercise to understand the intended function and desired result of leveraging contingent labor in an organization. Start by determining what attitude your organization takes for contract labor activities.

  • Is your organization the type to issue mandates and follow a defined contingent worker policy with a predetermined list of suppliers?
  • Is your organization governed by a consensus-driven “buy-in” culture that suggests general guidelines and a preferred vendors list that sometimes goes unobserved by managers (who sometimes go “rogue”)?
  • Is your organization a virtual “wild west” of contingent workforce practices, where different managers or groups engage talent differently without standard policies for defining and enforcing business rules for using temporary workers versus independent contractors or SOW providers?

Whichever type of contingent workforce engagement culture exists at your company, the key to ensuring positive results using contract labor lies in a proper focus on the culture of resources you are engaging; you can accomplish this in one of the following four ways:

1. Onboarding Contract Employees:

If staffing agencies recruit contract employees for your organization, the experience influences how your new staff perceives your organization. Factors like the tone of the interview with hiring managers, the overall office environment, and even the welcome (or lack thereof) from security guards or reception staff can all affect their first impressions. The staffing partners recruiting for your organization need to be familiar with the culture of your workplace and accurately represent the culture to candidates during recruitment.

)There is a similar need to manage the interaction’s dynamic for independent contract employees who aren’t typically interviewed (but instead navigate a contract negotiation process to define the scope of work and compensation.  

Whether outsourced to a solutions provider like nextSource or done internally, focus on how relatively easy or challenging the process is from the contractor’s perspective. If the process is arduous and unpleasant, a contractor might begin the engagement with a negative association. 

That’s one reason nextSource developed technology to complete worker classification evaluations quickly, efficiently, and painlessly. Being far less invasive than other organizations in confirming tax statements, proof of other clients, articles of incorporation, banking statements, and other IC classification activities makes a contractor feel at ease from the outset while still ensuring compliance.

2. Engagement: 

Employers often hire contract employees for their specialized skill sets,  which can greatly impact workplace culture. The  contract employees often share knowledge in their specialization, sometimes through cross-training or documentation; this can feel exploitative if conducted improperly.

Ensure communication styles match those used elsewhere in your organization. “How-to” manuals or SOP documents may suffice for companies watching budgets closely. However, those with larger budgets need to focus on meetings and in-person communications between specialized contract employees and their full-time counterparts.

3. Tenure Limits:

Contract employees are acutely aware their employment is for a set number of days. However, there are times when the work takes longer or involves additional projects. Top-performing organizations enact and enforce tenure limits to prevent the same worker from continuing in the same role.  While organizations should not continuously engage contract employees due to the increased costs, having arbitrary tenure limits based on a fear of co-employment can deter workers from joining your organization. Instead of a tenure limit, consider deploying other protections against co-employment risks to ensure ongoing worker engagement.

4. Offboarding:

Conducting simple operational activities—like collecting work products and company equipment—as markers for proper cultural alignment can ensure  smooth transitions for your contract employees. Managed service providers, like nextSource, obtain feedback from client managers to determine if the contract employees are eligible for redeployment within the organization. They also capture cultural fit and influence data to share with the hiring organization.

Implementing these activities to retain top talent keeps worker morale high and drives satisfaction with your organization. Ensure MSP partners, suppliers, and independent contractors understand not only your organization’s culture but also how to work effectively within it.

nextSource is Your Best Source!

Whether you’re an organization looking to streamline operations with the help of contract employees or an independent workforce member looking to jumpstart your gig work career as a contract employee, trust nextSource—we’re the reliable, informative source you’re looking for!

Connect with us today to learn how we can implement our world-renowned workforce strategies to optimize your operations. We look forward to hearing from you!

Thanks for reading! Check out our other blog posts for more insights on how to drive success in the workforce for your career or organization.

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