“By bringing IC engagement programs out from behind the curtain, having open dialogues and speaking in realistic terms, I think you can get professionals to understand and adopt your program.” – Dave Cassar
With the research that’s out today, and the turning tides of America’s workforce, I think enterprise organizations realize how important and critical of a resource their independent contractors are. So why is there a hesitancy to implement programs that engage ICs properly? A common point of concern I’ve found during implementation is that the real negotiations with contingent ICs happens at the manager level. These managers are typically not familiar with the nuances, regulations, implications and risks associated with leveraging this unique and valuable independent resource. They are focused on getting their job done and already have to fight to get the resources they need to be successful as it is. Our clients often feel that any change in the way managers currently acquire or source this type of talent is an uphill challenge; that it might become more complicated, and their IC talent could even leave.
This challenge can be overcome, and the key is education. The managers must be educated on the new process, including the reason and benefits for the program. Since this isn’t what these managers are focused on, getting their attention and interest is tough. That’s why MBO, for example, educates on multiple levels, starting with the Executive Sponsor. Executive support and sponsorship should address the reasons for the program, clearly outline the roles and responsibilities, and define consequences for working outside of the program. If the executive leadership is on board, we can educate the Program team, which typically includes Legal, HR, Procurement, Management, and Client Communications.
Case Study: The Educational Approach
A recent experience I had with an especially challenging client highlights the importance of education in adopting an IC engagement solution. The ICs in question were high-level medical doctors who had been doing business on their own for many years. The client wanted to move the doctors under the MBO Enterprise Solutions program for tax visibility, compliance and reporting reasons.
The management of these doctors was decentralized; they were spread out all over the country, and their managers were often doctors themselves. Doctors aren’t in the business of negotiating contracts, organizing payment terms, or designing efficient processes; they’re there to help patients. They saw our program as another process to deal with that didn’t help them, so education was necessary.
We started at the executive level, explaining the risk associated with direct engagement of independent contractors. Then, we had to customize our materials and efforts to educate this unique population and their managers. Basically, we had to educate medical doctors on contract negotiations, statements of work, and other matters relating to being an independent worker. What we found was that many of these people had melded into the organization in a way that made them fairly similar to traditional employees, as opposed to independent consultants; this poses a significant tax risk to the client.
That’s where we were able to educate the managers; the risk that their current engagement posed, and how our program would help. We used videos, presentations, conference calls, and live webcasts, as well as creating procedural documents and quick reference guides using our client’s industry language to keep as a deliverable for the managers.
What we found was that they not only understood, but were encouraged by MBO’s experience as a liaison between IC’s and their clients. We explained that independent contractors, when treated like employees for so many years, feel entitled to the same perks an employee would have. By resetting that relationship back to a traditional independent contractor, it redefines to the client that they can evaluate their consultants project by project, re-hiring if the performance met their company’s quality standards. In this case, the client was excited to get their relationship with the ICs back on track.
In this case, we ended up with the best possible result; the client adopted the program as their own. ICs like the doctors in this example are so comfortable with their employers that if the program comes from those managers instead of an outside group, they’re more likely to accept it. Instituting IC engagement programs, like any change management effort that hits to the heart of a business, can be intimidating and challenging— but they don’t have to be. We feel we have found a way to institute the programs effectively and manageably:
- Involve stakeholders at all levels
- Communicate often and consistently and
to the level of detail that makes sense for each group
- Use multiple mediums to communicate,
including video, presentations, webcasts, documents, etc.
Your ICs are a valuable resource. Engaging with them needs to be done right, and the key to that is targeted and thought-out education.