HR leaders may have to adjust departmental processes to accommodate millennial work habits. Millennials feel more positively about being hired exclusively on a contract or temporary basis than any other age group , according to ADP Research Institute® The Evolution of Work: The Changing Nature of the Global Workplace. As millennials become a prevalent component of the workforce, their preferences for working on a contract basis may throw a wrench into traditional HR practices and procedures.
Pros and Cons of Contract Workers
Hiring contingent workers on a contract basis offers a number of benefits for employers. Contract workers can help a business get through a busy season or complete a large project and there's no expectation the organization will maintain their employment after the contract period is complete. These workers can help the business increase efficiency and save costs because there's no need to pay employment benefits.
Even with greater flexibility in maintaining staffing levels, hiring contract workers isn't always easy for HR departments. In some cases, full-time workers may resent contract workers — maybe they assume they're taking away opportunities to work overtime hours. Or, if your business experiences regular turnover with contractors, you may spend more time and money on training. And because some contractors work for a number of organizations, it may be important to require nondisclosure agreements or even noncompete agreements to protect intellectual property.
Working With Contractors
The Freelancers Union reports that 54 million American workers are freelancing. So regardless of the advantages or disadvantages of contractors, the fact is that millennial work habits, new preferences of workers and continued advancements in technology promise to drive a continuing increase in contract work.
HR leaders should consider taking the following steps to accommodate these new work habits:
1. Establish Guidelines
The DOL has strict guidelines on whether workers should be classified as independent contractors or employees. If a worker basically has an employment relationship with a business, the business is required to pay for certain benefits and payroll taxes. If your organization hires contract workers, it's vital to ensure they're classified correctly or you could face fines. Consider developing specific guidelines on how contractors should be managed. For instance, managers should know independent contractors work free from control by the employer and are free to work for other businesses and hire help.
2. Train Managers
If your managers are accustomed to micromanaging, it's a good idea to offer training on how to manage contractors. Keep in mind many contractors have pursued their roles because they wanted autonomy. Just as you aren't committed to them permanently, they aren't fully committed to your organization. At the same time, it's important that contractors feel included and part of the team.
3. Streamline Payment
Many businesses pay employees through direct deposit but still cut checks for contractors. It might even take several weeks to process invoices and cut their checks. But it's important to show freelancers you value their work — paying them well and on time is a must. Even if you don't expect to hire a worker on a regular basis, establish an easy process for getting their payment information into your system, offer the option for direct deposit and pay quickly.
As millennial work habits transform the way people perform their jobs, HR leaders can be prepared to manage contractors well and make them feel valued. When the best contractors realize how easy and rewarding it is to work with you, they're likely to return again and again.
For more information, download the full (and free) ADP Research Institute® report: The Evolution of Work: The Changing Nature of the Global Workforce