Through my last few CWS 3.0 articles, I’ve been discussing direct sourcing — from how organizations are realizing the benefits of the concept to how it’s been applied to problem-solve through the pandemic crisis. Typically, a direct-sourcing program will target referrals and brand-attracted talent who are interested in full-time or contingent roles. What they often overlook are independent contractors.
Independent contractor relationships are meant to be efficient to engage, and, when positioned properly, they bring tremendous value. These engagements are often lower-cost compared to workers provided by large service providers and can be paid via a credit card or purchase order with little additional approvals. Their use can often be considered rogue spend, as it’s easy for managers to go outside the program to use them. Yet their value is depleted when well-meaning programs put them through a staff augmentation-like experience in order to ensure classification compliance.
Here, I explore how companies can maintain the value of ICs while folding them into the CW program.
Bring them in. Many programs today, concerned about misclassification, are loath to use independent contractors — and justifiably so. But instead of putting up roadblocks and precluding their engagement, companies can realize the potential of the independent contractor population by focusing on the value that is already present (like efficiency) and find ways to add additional value (risk mitigation consistency, cost equity controls, etc.) through centralization into your CW program. This can be done by pre-vetting platforms, creating guides to manage the process (pre- and post-identification), streamlining the compliance steps, and creating tools to best structure the work itself.
By building a stronger bridge to the talent and shifting the main focus from compliance to sourcing, you can entice your engagement managers to follow the established path and get support throughout the process from your CW program. The support in structuring the work (scope, contests, awards) will also help to ensure that the worker is being engaged for the right kind of service without becoming rogue staff aug.
Not staff aug. Independent contractors work differently from staff aug workers. It is important to be aware of these differences and build processes and tools that encourage this unique structure of IC engagements. The biggest difference is the self-containment of an IC during the engagement. True ICs should bring their own tools, operate from their own location (unless the job requires them to be onsite, like a nuclear propulsion technician), set their own work hours and apply their own techniques/direction to complete the work. The engagement manager needs to structure the work in a way that supports this distinction. By isolating the work and the information that is critical to the completion of that work, the engagement manager can free the IC of tasks that do not relate to completion of the work.
Removing the staff aug mindset can eliminate excess in your engagement and deliver more prescriptive outcomes without a variable cost. We can also remove excess steps and time from the screening process as the focus shifts from selecting a full-time member of your team that must bring a more balanced set of skills to finding a more accurate skill set to accomplish a finite task or project. This more agile approach to engagements begins to create a hyper-mature workforce-as-a-service mentality.
Management platform. Another area to consider when engaging ICs through your CW program is what technology platform to use. Very similar to a talent pool, freelance management systems or on demand staffing platforms have been underutilized by enterprise buyers. With the emergence of the direct-sourcing concept, the FMS is establishing a foothold as a strategic channel for sourcing talent.
The market now bears hundreds of these platforms with target audiences from software development to mechanical engineering. More than likely, the skill set you are looking for has a platform to support it. These aren’t just online message boards to help connect people to jobs; these are robust candidate databases with smooth interfaces that were designed for efficiency in identifying and engaging talent.
Often times these platforms are pre-vetting candidates to ensure certain compliance and skills checks (like NDAs, background checks, skills aptitude testing, etc.) are done before the match even takes place. The other added efficiencies come from the platforms’ ability to reconcile payments to ICs and track engagements. In many ways, these tools are replicating the functionality of a VMS but without a third-party vendor representing the talent.
As you consider how to craft your direct-sourcing program, don’t forget about the value that independent contractors can bring. This is not a new population of talent but one that deserves to get some of the spotlight. The real value comes from a formalization of the practices that are best suited for your business’s needs. If you have not explored the potential of an IC workforce, perhaps now is the time to consider how this model can become part of or ancillary to your direct-sourcing program.