How To Manage Contractors For Your Business

Learning to Manage Contractors

Many contractors may prove, by their behaviour and their lack of backup, of systems and of organisation, to be little more than “employees without bosses” – the modern day equivalent of defeated Samurai – the ronin of the business world!

As such they present an often hidden challenge to others in business.

The Challenge

Contractors may represent a cost-effective, on-demand source of anything from deep technical expertise to cheap labour – or they may represent an uncontrollable wildcard capable of scrambling the best of plans, of ruining hard-won relationships, and of destroying your profit and reputation in a blink.

Think of them like dynamite: Well-placed under controlled circumstances they can move mountains for you; ignited without control they may well blow a hole clean through your business – and anything else nearby!

Blind Faith

Too many people call in a contractor and hand over not only their task but also their responsibility for completing it, in the belief that their contractor is an expert who lives by the same standards and values, and operates at a level of knowledge and skill that will make it possible for them to deliver an excellent result in an excellent time at a reasonable cost. There is even the implicit assumption that the contractor, being a “true professional”, will of course do all of this “in their client’s best interests”.

That’s a huge leap of faith and, from a commercial risk management perspective, an entirely indefensible one.

The successful assignment of any task to a contractor must begin with your delegating that task with even more diligence than you would to a trusted employee, and that mandates that you adopt a strict Delegation Process as the foundation of your relationship with any contractor that you manage.

Delegation in 5 Steps

For any process of delegation to be successful most of the time it must pass through the following steps:

1. Select a delegate. Make sure they have the will to accept responsibility; and the skill to deliver (if skill is low you are responsible for training or support).
2. Facilitate their motivation by understanding and aligning their interests (growth, skill, responsibility, money, or to help) with achieving the outcome you require.
3. Delegate by first defining your desired end result from their work and putting that into a context and time frame; secondly by asking them to take responsibility; and (provided you sense they do so committedly); thirdly by giving them the authority required to direct the resources they will need; fourthly by creating a “safety agreement for learning errors” (LEGO’s is hard to beat, “You will not be blamed for mistakes, but you will be blamed for not asking for help or for not providing help”; and finally by checking their workload to clarify with them your desired priority for this task and their capacity to deliver (subbies are notorious for accepting every job and then shuffling between them to try and keep all of the plates in the air and spinning despite the fact that every job draws further and further behind).
4. Monitor. Agree on a monitoring schedule and format (report, meeting, etc)
5. Give feedback. Acknowledge & reward desirable results, then negotiate new stretch goals; analyze less than optimum results, identify required changes, invite commitment, provide support; and penalize wilful incorrect behaviour and re-examine your selection process.

9 Steps to Better Contractor Management

You might consider adopting the following process before beginning to evolve your own:

Induction

Whether it be face-to-face or a video chat, take any new contractor through at least a basic induction process during which you agree on the rules for working together.

Those will include understanding and agreeing:

1. The big-picture quantum, quality and timeframe of the desired end result;
2. Consultation to elicit contractor input that may improve your draft plan of action;
3. Agreement on the parties’ respective responsibilities (for everything from occupational health and safety; to related trades & services; to clean up, waste disposal and compliance issues; to insurance).
4. The performance rewards and penalties associated with those criteria;
5. A schedule of meetings to ensure a free and timely exchange of information;
6. The milestones and checkpoints that will enable both parties to detect and respond to exigencies;
7. Rules of the Game to manage variations in detail, scope, quality, timeframe, price;
8. A commitment to Project Values (of at least: collaboration; openness & honesty; and assured mutual benefit).
9. Appropriate documentation for the project to protect the parties against the frailties of memory under shifting conditions.

Consider formalising the above into a Contractor Induction Checklist

What About Working with Other People’s Contractors?

It may be the case that you have taken on responsibility for providing a design or plan which is then to be executed by contractors or staff provided by your client or other parties. Knowing that you have created the perfect recipe, how do you then control the preparation and cooking of the soufflé by which your reputation will stand or fall and, quite likely, by which your account will be paid or withheld?

The short answer is, “You consider what could go wrong – or what has gone wrong repeatedly in the past – and you read the preceding material and you then put in place a process that will enable you, at the outset – and preferably before commitment to the project – to simultaneously accept responsibility and obtain sufficient authority to control the quality and timeliness of the outcome.

Whether you are required or prepared to take on controlling the cost of the outcome is a separate matter for serious consideration and explicit agreement before you start.

Last word: If you use contractors to meet some of your responsibilities you are not thereby freed from those responsibilities; instead, you are assuming the additional responsibility of ensuring you achieve your deliverables through others.

As a professional you must strive to do that to a level of excellence. Anything short of that standard will create friction, pain and loss, including when you manage contractors.