Independent contractors are the pinch-hitters of the corporate world, specialists able to step in on short notice to achieve a goal. Typically, they’re responsible for their own development. But as economic conditions continue to increase reliance on independent contractors, a little attention from the Learning & Development team can make a big difference in terms of increasing loyalty and improving work quality.
Membership warehouse club Costco is seeing the benefits now as it aligns employees and consultants from different backgrounds and companies around a common mission. The immediate project, called Cosmos, began in 2012 and integrates finance and the HR/payroll systems with the enterprise resource planning solution. “One of the first steps involved breaking down preconceived notions about the various business functions and understanding the different perspectives,” recalls Halley Bock, CEO of leadership training consultancy Fierce, Inc. That required a shared framework of language, tools, and expectations.
Fierce, Inc., helped develop that framework, reminding the team—including contractors—to remain curious about diverse perspectives, to dig deeper, and to continually question reality. As a result, Costco’s Cosmos team is developing a cohesive identity and transparency across divisions and organizations that has increased collaboration and is breaking down business unit silos. Consequently, problems are solved faster and everyone is kept in the informational loop.
As Costco knows, inviting contractors to training events “…allows a common language and vision and ensures a common set of goals, which cultivates loyalty and a sense of engagement and commitment,” Bock says. For example, the deep knowledge and plethora of acronyms inherent in any specialty can get in the way of cross-disciplinary understanding. Therefore, “including contractors in meetings where everyone relearns the dictionary together becomes a tactical decision.”
A BUSINESS NECESSITY
For Green EDU, an accredited Environmental Protection Agency training provider, training independent contractors is a business necessity. The company works with 300-plus contract trainers to provide more than 400 training classes in 50 states. These contractors provide training in asbestos certification, hazardous materials, energy efficiency construction, cleaning and restoration, and many other topics. They typically are found through social media and Internet ads, as well as through states’ lists of licensed contractors. “They’re hungry and tech savvy,” says Zachary Rose, CEO, Green EDU, “but most importantly, they have real work experience.”
But they still need training. “Every second our contract trainers are in the classroom, we are potentially exposed to liability and must take every precaution to ensure our company is protected,” Rose says. Each independent contractor brought in to teach a class undergoes an extensive, three- to four-week “train-the- trainer” program before being considered for his or her first scheduled course. The classes are a fusion of asynchronous online, anytime classes, and synchronous classes online and with live instructors. Eventually, before being allowed to teach their own classes, the contractors shadow a senior instructor in a physical classroom two or three times, Rose adds.
Consequently, “we’re comfortable sending them onsite and know they’ll train our clients correctly. We’ve converted a good number of contract trainers to full-time employees,” Rose says. Those preferring to continue as independent contractors are loyal. “They always put us first,” Rose says, “because we help them develop skills that transfer across the board.”
GALVANIZE A CHANGING WORKFORCE
As the workforce transitions from permanent employees to independent contractors, freelancers, and consultants, the nature and duration of their projects is changing, says Michelle Benjamin, CEO and founder of TalentReady. “Previously, most contractors worked for a specified time and then moved on to another company. Today, a contractor may work for the same company for many months or years. Best practices dictate that basic new employee training programs also should apply to independent contractors.”
Additionally, Benjamin says, organizations are developing training programs to ensure their workforce is trained “not just on corporate policies but in areas prerequisite to performing their job functions.”
It also strengthens the relationship between the organization and the contractor. “Inviting contractors and vendors to attend corporate training programs at the corporation’s expense creates synergies between contractors and the person managing the relationship,” Bock adds. “It’s a wonderful opportunity to galvanize a team. And because it adds value to contractors’ personal portfolios, it’s a great way to strengthen the relationship as they work ahead.”
As Sandra L. Edwards, former senior vice president, AMA Enterprise, American Management Association International, points out, “sharing the corporate mission, goals, and strategies helps contractors feel like an important extension of the organization and vested in enabling success.”
But there’s another, often overlooked, benefit. In addition to enhancing skills, organizations have an opportunity to improve their networks and those of their contractors through social networking during training. This has the effect of building a best practice community that strengthens the talent pool. “It is critical to build a best practice community for your contract trainers to learn from one another,” Edwards stresses.
ACCEPTABLE TRAINING
Training for independent contractors can cover virtually any topic. “One of the most useful centers around communication and teamwork,” Bock suggests. “Transparency in communications that fosters strong relationships is essential to any team in achieving its goals. Such training allows contractors insight into how the company operates.” By not inviting contractors, organizations may miss out on their unique experiences and perspectives and, therefore, fail to achieve the best results.
As another, more technical, example, a client may teach an independent contractor how to bypass the client’s proprietary network firewall so the independent contractor may perform the server maintenance for which he or she was contracted, Rose adds. The training would only be how to access the system, not how to perform the maintenance.
As an alternative to providing or paying for training, Benjamin says, “many companies have extended their corporate pricing at local and online training centers to their contractors. The company is not paying for the training, but the contractor can take advantage of the reduction in price.”
IRS CONSIDERATIONS
However, good intentions also must meet the letter of the law to maintain the distinction between contractors and employees. “While it’s great to see companies making efforts to be contractor-friendly, there are some fine lines to be aware of,” says Dave Cassar, VP of Enterprise Solutions for MBO Partners, a company that managed the independent contractors for many of the Fortune 1000 companies. “It’s important that an independent contractor maintains control of how, where, when, and who performs the work. If a company trains the contractor on the manner and means by which they are to perform their services, the company is at risk of being classified as a legal employer, which carries risks and fines. Another determinant of independent status is whether an independent contractor brings a high or unique skill level to the client, so consider whether skills-based training could invalidate the contractor’s true independent status in the eyes of the IRS or Department of Labor.”
The IRS checklist (Form SS-8) helps differentiate between contractors and employees, and addresses training. As a rule of thumb, Bock says, “if a company requires an individual to attend training, the person most likely is an employee.” Therefore, she advises organizations to invite—but not require—contractor attendance.
Push and Pull
By Kent Sipes, Training, Communications, and Change Management Consultant, Io Consulting
When training independent contractors, it’s important to remember that they typically are paid by the job. When I used to train cable Internet installers, our contractors were paid $40 for every “install.” This meant a contractor typically did the bare minimum called for in our company’s contract, freeing him (or occasionally her) to move on to the next job. It also meant that contractors only sat through training classes as required to satisfy the contract terms and allow them to complete the install.
On the other side was the cable company—my employer. While the company certainly wanted installations done efficiently, it also was concerned about customer service, perceptions about the company, and allocation of resources (such as modems, IP addresses, bandwidth). This meant that I originally was allotted two weeks to train a group of eight to 12 installers (both company employees and contractors).
The other part of the equation was the end customer, the cable Internet user. The customer was interested first in a working high-speed connection, for the lowest possible cost. Customers also didn’t want an installer in their homes for any longer than necessary.
These competing priorities forced me to re-examine what I taught and how I taught it. For instance, there was a portion of the class devoted to customer education—how to help the customer understand and use his or her new high-speed Internet access. Once I realized that contractors would spend almost no time on customer education, I was free to eliminate that portion of the course. Instead, we concentrated on improving our “leave-behind” materials.
I also removed most of the lecture portions of the course, and consolidated much of the hands-on practice. I ultimately was able to condense the course to one week, while still providing the essential training to equip these folks to satisfy our end customers and keep our company profitable.
Training contractors is a balancing act, involving many competing priorities. Understanding the priorities of each group your training serves will increase the likelihood that you’ll be able to satisfy them.
Quick Tips
- Consider including contractors in meetings where everyone learns (or relearns) the company’s mission and values and the relevant industry acronyms together.
- Since contractors may work for the same company for many months or years, best practices dictate that basic new employee training programs also should apply to independent contractors.
- Build a best practice community for contract trainers to learn from one another.
- One of the most useful training topics for independent contractors centers around communication and teamwork.
- Consider extending your corporate pricing at local and online training centers to your independent contractors.
- Check the IRS checklist (Form SS-8) to make sure offering training doesn’t invalidate the contractor’s true independent status in the eyes of the IRS or Department of Labor.
