4 Tips for Managing Independent Contractors

Managing an independent contractor is significantly different from supervising a traditional W-2 employee. Independent contractors have the freedom to control where they work, when they work, and how they decide to accomplish the deliverables agreed upon in your contract. In fact, a common litmus test for determining whether a worker can be classified as an independent contractor is the level of control they maintain over their work.

While it’s important to keep these differences in mind when engaging independent talent, you can still ensure that the independents you hire are working productively toward a mutually successful outcome. Keep these four tips in mind to manage independent contractors effectively and enhance their experience.

1. Create a Contract

Traditional W-2 employees have job descriptions that define their responsibilities. You can use these responsibilities to set boundaries and provide guidelines for measuring performance. When engaging independent contractors, however, a Scope of Work (SOW) or written contract outlines the project or job to be done. Making sure there is always a written contract between your company and the independent contractor is rule one in creating a contractor management program.

A Statement of Work (SOW) lays the groundwork for a strong working relationship with an independent contractor. Besides outlining the tasks and deliverables, it specifies the project timeline and payment terms. Before kicking off the project, collaborate with the contractor to create a detailed SOW. Make sure it includes a clear process for handling changes to the project scope, budget, and timeline. Unexpected adjustments are bound to happen, so having this process in place will save time and reduce stress when those inevitable bumps occur.

2. Communicate Clearly

As part of your contractor management program, establish a process for communicating progress before the project begins. Will there be weekly phone calls or progress reports? Consistent communication ensures that issues can be resolved quickly, and that you and the contractor you are working with are aligned on goals and expectations. Setting up regular check-ins or reports can help keep your 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 help your contractor avoid delays in the case they have to wait for reviews and approvals from multiple parties.

To best facilitate communication, consider using a shared workspace such as Basecamp or a folder on your VPN. Talk with your independent contractor prior to the project to establish what will work best for both of you. The contractor may be able to recommend a system they already have in place for shared communication and document collaboration.

3. Set Project Goals and Milestones

Setting goals and milestones can help keep your project moving smoothly from start to. First, define success measures. While you may want the work completed in a specific amount of time for the agreed upon budget, there are other ways to define success. Make sure the metrics you choose are relevant and timely.

Setting clear milestones is the second step. Milestones provide defined targets and can help ensure independent talent is making consistent progress towards the goals you set. If you want to track milestones, consider using a shared calendar through your internal systems, project management software, or calendar tools such as Google Calendar.

4. Keep the Bigger Picture in Mind

When working with independent contractors, you are managing a business relationship—not an employer-employee relationship. You do not account for the hours independents work in the day, but you can measure their performance by the product they produce, the interactions they have with you and with your team, and how they manage the project.

Rather than reinventing the wheel with each new engagement, a contractor management program should include a standard process for engaging and managing independent workers. A defined process will help enterprise managers adopt a uniform approach to measuring performance. You’ll also be able to identify your most successful contractors to create a virtual bench of talent that can be leveraged for future opportunities.

Learn More: How to Source Consultants for Projects