Don't Fall in Love With Your Contractor

Don't Fall in Love With Your Contractor

A great contractor takes initiative, meets deadlines and is pleasant to work with. They're also honest and open about their work hours and budget. When you find a contractor of this caliber, you do everything you can not to lose them; you might even be considering incentivizing him or her by offering them a supervisory role. Without realizing it, you have fallen in love with your contractor and now it's time to take a step back.

Love Isn't Always Fair

There is a good reason why you should never fall in love with your contractors: they are not employees. The professional relationship between contractors and your organization is based—or should be based— exclusively on achieving mutual goals that serve both parties equally.

As contractors become immersed in the everyday landscape of your organization, it is easy to blur the lines between them and your salaried employees. Everyone gets along and does great work, so why should it matter? Failing to distinguish a working relationship from a personal one could result in a heavy blow to your bottom line. This is why it is so important to follow the cost structure you decided upon from the beginning. If the budget requires adjustments along the way, make them objectively by taking the "person" out of the equation.

Don't Mistake Overachieving with Overpaying

Project managers must be able to differentiate between paid contractors and salaried staff at the forefront of their decision when tasking out a project, to make efficient use of each worker.

Ideally, a company employs the best person at the best rate to do a particular job, whether that person is found externally or internally. Under certain circumstances, the best person may be a contractor due to a particular skill set or tool proficiency.

But when your team works side-by-side with a contractor for a long time, they can forget this person is being paid at a much higher hourly rate. As the relationship develops, employees may completely forget the business relationship.

Is It Time For A Commitment?

If the management team feels that strongly about a contractor's work, or dispenses a significant portion of their budget on this individual regularly, it might be time to hire that person as a full-time employee.

In some cases, hiring the contractor as an employee can be more cost effective by eliminating the premiums (recruiting costs, commissions, fees, etc.) that are part and parcel with contracted workers.

You may also consider setting limits on the tenure of contractors, not because you won't extend the contract if necessary, but because it makes sense to re-evaluate business relationships from time to time.

Managing the Contractor and the Contract

To engage and manage contractors successfully, many organizations rely on a vendor management solution. According to, nearly 75 percent of the Fortune 1000 companies either currently use or plan to use a VMS platform to manage their independent contractors1. Vendor management supports a strategic approach to overseeing an organization's contingent workforce, helping to reduce costs and mitigate the risks of adding full-time employees. It helps manage resource efficiency by tracking labor costs and hours worked, and provides much needed transparency. In addition to a VMS solution, some organizations opt to work with a Managed Service Provider - a third party that often uses VMS to comprehensively manage every aspect of contract workers. For some, an MSP provides a more complete solution than VMS alone.

Although it is great to find a quality, likeable contractor who embraces the company culture, it is important to maintain objectivity. Unless it makes sense to hire the contractor as an employee, keep the personal and professional separate and your budget intact.