Workforce.com

Arms-Length Embrace

Why companies have to love their contingents, not just abide by the law and use them to cut labor costs.

June 18, 2012

We here at Workforce are trying to raise our game when it comes to contingent workers.

Like a lot of you, we are working with contractors to accomplish our goals, and we want to get better at it. I'm convinced that to win in this new era of more impermanent workers, we need to concentrate on winning people over rather than on cost-cutting or compliance.

We need to love our contingents.

This is a big topic, one we plan to focus on in the weeks ahead. All signs point to greater use of contingent workers—by which I mean temporary workers and independent contractors and consultants.

But as I see it, much of the current thinking about contingents is limited if not outright wrong. You often hear that contingent strategy is all about staying lean, and that the biggest risk associated with nonpermanent workers is misclassification.

To be sure, trimming expenses and a desire to stay nimble amid an uncertain economy are legitimate reasons to use contingent workers. And there are real pitfalls to improperly calling people independent contractors when they actually qualify as employees.

But legal compliance and some degree of labor flexibility are the table stakes here. What's really going to allow organizations to succeed in the emerging world of more contingents is a tried-and-true formula: be the employer of choice. (Or, in the eyes of the law, the nonemployer of choice.)

Some contractors enjoy the ability to float from gig to gig. But many are freelancing out of necessity and crave greater economic security. They are ready to forge close relationships with good companies.

You want your organization to be the place that the best free agents flock to, and you want to generate the best work from folks who may be juggling two or three other gigs.

Just a smidgeon more devotion from that contract marketing pro or product designer could make the difference between a hit and a ho-hum outcome.

It may be a new era of looser labor ties, but old rules still apply when it comes to attracting the best talent and getting the best work from people. You need to pay decently, manage people well and inspire them.

That means not nickel-and-diming contractors. It means paying promptly—and working with staffing firms that treat people well.

Supervision also is crucial: If you don't set clear expectations for contingents, it doesn't matter that you're saving on the costs of health care benefits.

One way to fire up nontraditional workers, it seems to me, is to involve them in conversations about strategy or new business opportunities—treat them as partners rather than "hired help." In recent months, for example, we included one of our top freelance writers, Michelle V. Rafter, in content planning discussions. And I asked her to join me on a panel about social media at our recent HR Tech Week virtual conference.

So while we're steering clear of a traditional employment relationship with Michelle, we are bringing her closer to us.

This is just what Michelle is looking for. "I think I can speak for many freelance workers when I say we value long-term commitment from clients just as much as they value it from us," she told me. "And why not? Who wouldn't want to spend their time reporting and writing stories for publications that are known entities and treat us well rather than cold pitching new-to-us editors who could end up making Miranda Priestly [Meryl Streep's demanding character in The Devil Wears Prada] look like a saint?"

The workforce is becoming more impermanent. But it's also becoming more social—relationships matter more than ever. With our contingents, we need to be at once separate and significant to each other. Call it the arms-length embrace.

Ed Frauenheim is senior editor at Workforce Management. Comment below or email efrauenheim@workforce.com.