Winning in the Outsourcing Game

As an independent professional in the business consulting game, there will be times when you come across a project that has aspects that fall outside of your scope and expertise. For example, say your specialize in traditional marketing but a client of yours is looking for some web design consulting, you don’t need to turn this kind of project down just outsource the work to someone in your network.

If you find yourself in the above situation it would be a good time to bring in an independent contractor. Since contractors are not employees, you avoid certain administrative and human resource headaches, and, instead of having full time salaries to worry about, you only pay for work done.  Also with the devopment of internet outsourcing services like Elance.com and Odesk.com you can find consultants and contractors for almost all your business needs.

However, there are a few pointers that you should consider when using contractors. These include:

  • Make sure that you have legally binding agreements in place, and that these clearly indicate, along with all other factors, that the person or persons involved are independent contractors.
  • Ensure that strict guidelines are set down as to when, how and where work is to be performed. For instance, make sure that the contractor does not assume that they would have access to your facilities, if that is not the case.
  • Confirm with the contractor whether he or she will personally perform the work, and if not, to whom will they delegate, and what is that person(s) capabilities?
  • Set rates of pay, and frequency, well ahead, and make sure the contractor agrees to this in writing.
  • If there are set hours required for the work, for instance, if you require their services at your client’s premises during working hours, ensure that this is also agreed to in writing.
  • Ensure that travel and other expenses are discussed, and a firm agreement on liability is reached, also in writing.
  • Make sure whether the contractor has any required equipment, materials or other necessary items on hand, or can obtain them timeously. Also, agree which of your own tools and equipment, if any, the contractor will have the use of.
  • Establish whether you are the contractors only client, and if not, whether the contractor has the capacity to service more than one client.
  • Discuss and confirm in writing the grounds for dismissal, or cancellation of the contract prior to completion. Set out acceptable and unacceptable work practices, and the methods by which disciplinary action will be taken.

This may sound like a complex and time consuming process, but the reality is, if you make use of contractors on a regular basis, most of the work involved in setting up a contractor agreement can be done once, and the generic document amended as needed, on a case by case basis.

Unlike employees, the contractor is their own boss, as are you, and they are therefore responsible for their own supervision, for timeous completion, and satisfactory results, and, unlike employees, you, as the business hiring them, have the option not to pay them if they do not deliver.

On the other hand, contractors are their own entity, and have no ties or loyalties to your company. This means that aside from financial aspects, they have no vested interest in the success of your project.

Contractors can be a valuable asset to your consulting business, but the process of hiring, managing and terminating their services needs to be properly managed from day one.

If you take care of that aspect from the start, you should be fine, and you could develop a very good business relationship with your contractors.

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  • Good posting,i would like to add few more points for contractors:
    1.Build in the contract gain sharing, incentives and penalty.
    2.See that there is transparency in Account management to develop outsourcing relationship.
    3.Clearly mention everything in a agreement like loss and benefits.