Managing Contractors

Hiring, Managing, and Motivating Contract Workers

Managing Contractors - Hiring, Managing, and Motivating Contract Workers

© iStockphoto

Manage your contractors effectively.

It's happened again. The company CEO has set a new, incredibly ambitious goal for your department. And the deadline? You've got six months to make some pretty drastic changes.

Suddenly you've got more work to do than you've got hands to do it. Fortunately, you have the option of hiring contractors to help with the sudden influx of short-term work.

Inevitably, contractors have their own set of challenges and drivers. This means that from a management standpoint, they're going to need some different carrots from those you use with your permanent staff. So, what should you consider before hiring contractors? And what can you do to keep them motivated until the job is finished?

In this article we're going to discuss these important issues so you have the tools you need before bringing contractors into your team.

Why Work With Contractors?

One of the most common reasons for taking on contractors – temporary, full-time staff in "business as usual roles" – is because of the situation described above: a short-term requirement for extra members of the team. This is usually because you need to run a special project, but it might also be to cover staff absence as a result of a secondment or long-term sick leave.

With contractors you have the ability to hire people based on specific skills they have that you need, and once the job is done they happily move on to another company. And even if your project is cut prematurely, shedding contract staff usually carries few of the issues involved with downsizing your permanent team.

Contractors are also invaluable because they're so flexible. For instance, if you identify a position that urgently needs filling in your department, finding and hiring a permanent staff member can take weeks or months. A contractor, however, can step in virtually the very next day and start filling in the role until someone more permanent can start.

This also allows you to find out if that role should become permanent or not. And the best news? Contractors excel at going into a new environment, learning what they need to know quickly, and getting to work. Permanent new-hires tend to have a much longer "induction" period, which can be frustrating if you're pressed for time.

Downsides to Working With Contractors

Like anything, there are always some negatives to offset the positives. The most common downside is that contractors have no knowledge of your company when they start. And when they're done with the project, all the knowledge and expertise they've gained can easily to walk out the door with them. As a manager of contractors, try to find ways to capture these before they go.

Contractors will also tend to have only a limited interest in their client company as a whole. Sure, they'll be loyal to their boss, and the team they're working with, but contractors know that their time there is limited. So unlike permanent employees, they're probably not going to become passionate about the organization, and they also know they won't be around in two years' time when some lurking problem in the work they're doing today rears its ugly head. Both of these factors this might limit their enthusiasm for going the extra mile.

Finding This Article Useful?

You can learn another 301 team management skills, like this, by joining the Mind Tools Club.

Join the Mind Tools Club Today!

You also run the risk of getting a bad apple. Because contractors are in and out of companies all the time, a few seem to like to see how far they can push managers. After all, if they're "terminated" from a job that mark is not going to show up on their resume like it would with a permanent employee.

If you do happen to get a contractor who is a bad apple, then firing them is a bit easier than your permanent staff. This can be appealing, especially in Europe, where it's much harder to fire team members.

Hiring Contractors

Make sure you have written contracts that detail your expectations. This takes the place of a formal job description for contractors. Be specific about the work description, any deadlines, and compensation.

If your contractor will produce something, like designs or written material, the agreement should include who will own the rights to this work.


Because they may not have been through a rigorous interview process, they may not have fully understood exactly what you want. So if contractors aren't performing at the level you expect, or if they’re not addressing the right issues, then you must tell them.

Integrating Contractors With Your Team

If you hire contractors to work with your staff on-site, make sure you treat everyone equally, and that your permanent people know to do the same. Permanent staff may view contractors as ‘outsiders,' may be reluctant to work with them, and may even be unfriendly.

To prevent this, make sure your team members clearly understand the contractor's role: what they're doing, where they fit in with the team, who they answer to, why they're working on this particular task or project, and how their own roles may benefit from having this added resource.

It's also important to realize that you'll have to do most of the work getting the contractor up to speed. This is normally not a task that HR will take on, since the contractor isn't a permanent staff member.


Having an experienced 'outside' join your team for a short period can be a breath of fresh air! Encourage them to share other ways of going about what you're doing which they've observed in the many other organizations they've worked in, and be open to taking on these new ideas to improve your process and practices.

The good news is that contractors slip into new companies and new roles all the time, so they'll probably know what questions to ask to get started as quickly as possible.

Motivating Contractors

Most of the time, independent contractors are able to keep themselves motivated. After all, this is their business. If they don't do a good job then they probably won't get more work, and this is clearly a great motivator.

Contractors tend to be more financially motivated that permanent staff members – after all, they've traded in the security of a permanent job for the higher daily rates that contractors command. Having said that, they're still human, and they will value feedback and thanks just as much as the rest of your team, so make an effort to praise the work that contractors do for you when it's done well. Many managers forget this step.


Contractors often drive smart cars and wear the latest designer suits or outfits. These highly visible symbols of their higher income can easily create resentment amongst lower paid permanent staff. As a manager, make sure you gently remind the permanent members of your team of the alternative benefits they get in their position: much greater job security and stability, scope for career progression, and so on.

Another reason that contractors have chosen the temporary lifestyle is that they enjoy the variety it offers them. This contrasts with the preference that many permanent staff have for stability. So feed your contractors' enthusiasm for change and innovation – and at the same time shelter your staff from unnecessary disruption – by giving the contractors any work that involves this.


If you've hired a contractor as a stop-gap while you get official permission to create a new permanent role, don't be disappointed if the contractor who has done the work so well for six months doesn't want to take on the permanent role. He or she has chosen the contract working approach for good reasons, and the same work in a permanent situation simply may not fulfill his or her needs.

Equally, don't just keep extending a contract to save yourself the work involved in getting a permanent role approved. After a while, this gives the message that you don't really value the role, and if it's occupied by a contractor, this makes it hard for your co-workers to build relationships with the post-holder. Use contractors in temporary positions, and work towards having permanent team members in permanent roles.

Key Points

Working with a contractor definitely has its pros and cons. They can be incredibly beneficial to a company who is pressed for time and staff members, but you also have to guard against getting a "bad apple" who will see how much they can get away with.

If you're managing contractors, have a clear, written contract that details exactly what work will be performed, and what their compensation will be. Managing contractors is different from managing your regular staff. Communicate openly, and make sure they have the tools they need to get the job done.