Dee Davis (00:46)
Good morning and welcome to the Management Under Construction podcast. I'm your host, Dee Davis, and today we are going to talk about the value of contract labor and how that can help you get over the hurdles, crunches, and unexpected transitions in your business.
We're not talking about temps from some staffing agency, but real skilled workers. go by many names, fractional, project-based, staff augmentation, or consulting fill in the title. This works for an executive, a project manager, a designer, a detailer, a project engineer, or any other position that you need to fill right now.
We're going to talk about how hiring an independent contractor is a little bit more like dating than finding that perfect mate to marry. Tell me if any of this sounds familiar. You write up a job description, put out an advertisement on social media, your website, some job boards. You wait for people to respond. Maybe you get hundreds of responses. A lot of them aren't qualified.
you spend weeks sorting through them. If you're using bots to help you do any of the sorting, they're most likely throwing out the bad with the good because most HR bots are really not trained properly to screen resumes. If you have jobs that remain open for months because you can't find the right fit of skills and education, maybe you're looking for that purple unicorn to fit in just right with your organization.
By the time you get through interviews, people are no longer available. They don't show or they cancel on you. Even when you do finally hire, people flake out, they leave you hanging or they start and don't stay. And here you are back to square one. I've got a solution for you.
Call it a patch, a fix, or just another way of solving your staffing challenges. Not with a staffing company that sends people to answer phones and make copies or day laborers to dig ditches. I'm talking about real ongoing roles that require skills and experience. Professionals with years of experience coming into organizations just like yours. They do this for a living so they can be productive quickly without the worries that come with making the wrong hire.
I'm talking about independent contractors, 1099s that come into your organization to fill a short term, long term or project need. I can hear some of you saying right now, I don't know, I'd rather hire an employee that's going to be with me for a long time. Totally valid. But what are you going to do in the meantime? In the weeks and months that you spend looking for that perfect employee, two different things are happening.
One, the job isn't getting done. The work is piling up. Your existing employees are trying to pick up the slack the best they can, but your business and your projects are suffering. The second thing that's happening is you're neglecting to look at an entire segment of the population that might actually fit your bill. Did you know that there are over 60 million people in the United States that are independent contractors, either full-time or fractional?
In 2023, there was 12 million people, in 2025, 17 million. That is how fast this market is growing. What we're seeing in the marketplace more and more is that people are wanting the flexibility of being entrepreneurs or solopreneurs, people that are just out there contracting themselves and not forming these big corporations.
They're not working as a W-2 employee and that trend is going to continue to grow as the workforce changes. As we've discussed before on the cast the days of people staying in the same job for decades is over. And although we may not like it, it's the reality that we're living in. Let's examine some of the common concerns that employers have about using independent contractors.
I don't want them to steal my company secrets. Okay, that's a fair concern. But here's the thing, independent contractors very frequently operate under non-disclosure agreements. It is absolutely fair and reasonable to ask an independent contractor to sign an NDA to protect your company. We're used to it, we do it all the time. The other thing is, that
Professional independent contractors like me, we have a reputation to protect. There's no way that it's gonna help us to go share your secrets with your competition because it's going to reflect badly on us and prevent us from getting future work.
Here's another concern you might have. You want people that are gonna stay here and grow with your company. Also a very fair argument. the problem is that's not happening right now as you're trying to fill these positions. It's a good strategy for a long-term hire, but what are you doing about today and tomorrow, next week and next month?
I'm concerned that independent contractors can just leave whenever they want. Well, so can employees. Did you know average tenures in companies are less than three years these days? That's not very long compared to what we've seen historically, but the reality is, many people are changing jobs every 10 to 15 months. Three years is considered a long tenure these days. conversely, I have
contracted with clients for five plus years at a time. I'm concerned that independent contractors don't care as much as the employees do about the customers and the long-term success of the business or the project. That's also a valid concern. But as someone who's been a contractor for many years, I am deeply invested in the long-term success of my clients.
I rely heavily on my reputation and repeat business and referrals. Your success is my success.
Aren't independent contractors just hired guns that will leave as soon as someone offers them more money?
I'm not saying that this never happens, but it happens with regular hires too. Hiring an experienced independent contractor that does this for a living is a lot better than hiring somebody who just hung out their sign in between jobs or projects as a way to keep the money coming in. Experienced professional independent contractors will more often stay for the duration of your project.
Besides, ditching a client during a contract or a project, it's not great for business. If you like what you're hearing so far, hit the like button and share this episode with a friend.
Let's talk about some advantages of hiring an independent contractor. It's faster. This is generally done with a form contract and some agreed upon rates. An independent contractor can generally start within a week of making a decision. There's no HR onboarding or benefits paperwork. There's no waiting for IT to order them a laptop and get them set up.
Independent contractors come with their very own equipment unless you have a specific company requirement for them to use your equipment.
Vendor setups are typically much faster and easier than payroll setups. Confidentiality. NDAs are common. We don't mind signing them. We also know how to keep your secrets because we have a reputation to protect.
Value. Expert level experience at an hourly rate that is lower than salary plus benefits package. Think of it. You don't have to provide vacation days, holidays, sick days, 401Ks, retirement accounts, ESOPs, bonuses, or profit sharing. Wouldn't that be amazing? There's less upfront costs. Professional independent contractors are used to going into organizations just like yours and being productive right away.
Because they are responsible for their own equipment, training, and basic software, there's less upfront costs for the employer, and you're gonna see results much faster.
Here's the best part, there's no obligation. If they don't work out, it's really easy to move on since it's a contractor relationship, not an employee relationship. You don't have to keep contractors fed when the project or the need is done, so is the job.
Hey Dee, should I develop a relationship with a company that can provide these services or should I find individuals?
There are advantages to both. Companies that provide these services often have a pool of people that they can draw from, or they keep on staff and farm out as needed to clients. With these companies, you will be paying markups for their overhead. Individuals can usually provide lower rates. I'm working with an AEC recruiter right now.
on expanding their services to include placements for independent contractors just like me to help make it easier for employers to locate just the right person. In the meantime, if you're looking for someone, let me know. I have a wide network of people and if I can help you with a connection, I absolutely will. Better yet, tell your recruiter, either internal or external, to open up the jobs to both W-2s and 1099s.
Hey Dee, I have a job req that has been open for six months and I can't fill it. Should I just go ahead and fill it with an independent contractor while I continue to look? Absolutely yes. If you have a job req that is open for more than three months, you need to start asking yourself why. Here's some of the most common issues that we find. The job listing is for a purple unicorn.
someone with all the education, the certifications and the experience with a salary for someone who's maybe five years into their career, you need to take a critical look at what you're asking for and ask yourself some really hard questions like, is a degree really required? I see tons of job reqs out there asking for advanced degrees when a basic degree isn't even needed.
Is 10 years experience really required? Does the salary or salary range posted match the description and the requirements? Are the responsibilities that you're listing for one job or for three? If you're asking for somebody to be their own project coordinator, project manager, project assistant, estimator, and executive, you're probably not going to fill the job. You need to
narrow down the responsibilities for the person that is going to be hired.
Is the salary range listed for the position from 1987? I saw a job req the other day for a project manager that was at a project engineer rate that I got 20 years ago. You need to take a real hard look at the salary ranges that you're listing because if you're listing low, you are not going to get quality applications. If your location isn't the most desirable,
You need to be aware of that and maybe offer some perks or some flexibility that will help attract the right talent. If you're requiring people to be in the office full-time for a job that really doesn't need it, that's gonna make a big difference in attracting full-time regular employees. In the meantime, contract laborers are a little more forgiving on that front.
Look at your internal processes. How long does it take for someone to get from application to interview? How many interviews are required before you make a decision? Are your interview processes one way or two way? The applicant should be interviewing you as much as you are interviewing them. And please tell me that you are not using bots or automation to do interviews. That is the biggest way to turn off good talent.
What kinds of questions are you asking during the interviews and how does it help you determine if the person is really the fit that you're looking for? We always hear the interview joke. If you were a color, what color would you be? It seems kind of crazy, but some of the questions I've been asked during interviews are just as pointless. Once during a project interview as a consultant, I was asked, where do you see your career in the next five years?
how could this possibly matter in this context? What that told me is that the people that are interviewing really have no idea, they have no plan. So make sure that you're going in to the interview with a plan, you have a clear picture of what it is that you're looking for and try to ask questions that will answer for you whether or not this person is a fit or not a fit for your company, your culture, your position. Let's face it.
When you're trying to fill a job with a permanent employee, it's a ton of work. You're going to sell your company, your location, your team, your culture. It is a long-term commitment. When you're hiring an independent consultant, you're hiring to get the job done. And that's pretty much it. Hiring an independent contractor is a lot more like dating than a marriage proposal.
Hey Dee, it's kind of uncomfortable to hire someone when I can't promise them how long the job's gonna last. That seems really unfair. Well, independent contractors are used to that uncertainty. It's kind of part of our job. Just be honest about your ultimate goal and keep in communication with them about the status. Be as courteous to them as you would want them to be to you. Thanks for joining us. Don't forget to like and share this episode and subscribe to the podcast.
Thanks and have a great day.
