The Do’s and Don’ts of Contigent Workforce Management

Greg Cannon writes for www.ework.com – a Ms.Money partner.

With today’s labor market tight as a drum, hiring independent professionals to fill a last-minute hole in a project team or provide outside expertise can give companies a leg up as they strive for the most efficient use of resources.

But while the payoffs are many, so too are the potential pitfalls. According to employment experts, there are a few golden rules to keep in mind when managing a contingent workforce; rules that will ensure that both your company and the independent professionals it employs get the most out of the relationship.

Companies that tend these relationships with care will be well served, enjoying the benefits of a flexible workforce while providing an attractive work environment that will keep in-demand workers coming back for more.

And perhaps just as importantly, they’ll keep from running afoul of laws that differentiate independent contractors from permanent employees.

DO HIRE AS IF THEY’RE PERMANENT

When Crimson Consulting needs to staff a project, it draws on a group of 1,600 permanent and independent consultants, every one of them a known quantity. “We are making hiring decisions at Internet speed,” says Glenn Gow, President and CEO of the Los Altos, California-based e-commerce consulting firm.

That doesn’t mean Gow skips all the traditional means of evaluating candidates when recruiting independents, it just means he does them faster. That means face-to-face meetings with every consultant being considered and background checks that benefit from what Gow calls Silicon Valley’s “two degrees of separation.” Gow figures that with two phone calls, he can bypass a candidate’s own references and track down someone who has objective, first-hand knowledge of their work.

DO TREAT THEM THE SAME AS PERMANENT STAFF…

When it comes to integrating independents into project teams, companies may be tempted to stop short, keeping workers at arms length because they know they won’t be around for long. Gow says that’s a mistake. Ideally, every independent would be able to walk in and work with a group of new colleagues and a new client without missing a beat. But that’s rarely the case. Whether it’s familiarizing a consultant with company culture or providing training to strengthen certain skills, Gow says the client and, by extension the company, benefit when independents are truly part of the team. W. Gilmore McKie, a human resources consultant and co-author, with Laurence Lipset, of “The Contingent Worker: a Human Resource Perspective” (Society for Human Resource Management, 1995), agrees.

“I’ve always encouraged the employer to look upon them as a regular employer in terms of how they train them,” McKie says of independents.

That means giving them a proper orientation and introduction to what the company is about and what its expectations are. “Or else,” McKie adds, “they’re not going to be able to do the job as successfully…when the rubber hits the road.”

BUT DON’T FORGET THEY’RE DIFFERENT

But while companies can benefit from blurring many of the traditional barriers between permanent and temporary staff, others are glossed over at their peril.

When using independent contractors, companies “have to be very, very careful that they are indeed independent contractors,” says Patricia Stansbury, head of San Francisco-based Stansbury Staffing Consultants Inc.

The word on every human resource professional’s lips these days when the topic turns to contingent work force management is “Microsoft.” A court ruled recently that the software giant had to open its stock purchase plan to temporary workers who were so long-term that the court said they were effectively permanent.

Federal labor laws often differ from state laws, and state laws vary greatly, but Stansbury warns companies to be especially aware of where the legal line – with regard to wages, overtime, and worker health and safety laws – falls between permanent workers and independent contractors.

Of using independents, Stansbury says: “It works out great when everyone gets along and everything’s great. It’s when there’s a problem that things turn difficult.”

DON’T PASS UP THE OPPORTUNITY TO LEARN FROM INDEPENDENTS

“We’ve learned more about how to manage our (permanent staff) from the way we manage our contractors,” says Crimson’s Gow. In striving to create a challenging, enjoyable work environment that will appeal to fickle free agents, Gow says he came to the realization that, in today’s labor market, his employees too are free agents. Recognizing that they could leave at any moment makes him a better, more responsive manager, says Gow.