No matter the size of your company, onboarding contractors is crucial for success. From one-off tasks to ongoing projects, independent contractors handle jobs that full-time employees are unable to manage. Understanding the benefits of hiring contractors vs. employees can help you decide when to bring in external talent versus expanding your in-house team.
Even though your contractors aren’t officially part of your organisation, they’re still a central part of the team. Therefore, they should engage in the onboarding process as though they are full-time staff. As such, they need to know your company’s processes, culture, policies, and specific requirements. The more they understand your business environment, the better their work productivity will be.
That said, the contractor onboarding process can be challenging—especially if they work internationally.
To help you navigate the complexities of onboarding independent contractors, we’re sharing some practical hiring tips.
Guide to Onboarding Contractors Effectively
Whether your contractors are down the street or across the globe, there are three core steps in the contractor onboarding process.
1. Preparing Contracts and Ensuring Compliance
To start, you have to put the “contract” in contractor onboarding. While independent contractors are not employees, you still need an official agreement between your organisation and the worker.
This contract should:
- Outline the specifics of the relationship – In no uncertain terms, your agreement must define the scope of the contractor’s role as it relates to your company. No matter the project size, every contract should outline the worker’s status, rights, obligations, and expected deliverables.
- Stipulate payment terms – Another critical component of the contract is compensation. Your agreement should explain how much the contractor will earn, when they’ll get paid, the payment method, and the currency. (More on payments below.) In addition, you should ensure compliance with legal and financial requirements.
- Clarify who owns the creative rights – This section is vital if you’re partnering with contractors who produce intellectual property (IP), such as graphic designers, photographers, and copywriters. In some cases, the contractor may wish to retain the rights to their creations; in others, you may become the IP’s owner.
Drafting an airtight contract that meets all these requirements can be complicated—especially if you don’t have a background in global contract management. To give your new contractors the best possible experience and keep your business compliant, consider partnering with an expert on global contract work, like Omnipresent.
2. Setting Expectations and Providing Resources for Successful Contractor Onboarding
Once the contract is ready to sign, your next step is to discuss your expectations for the onboarding process. These expectations are separate from the official business or legal obligations outlined in the agreement.
For example, you might provide a deadline for the contractor to complete the onboarding process and define what success will look like.
Now is also the time to provide the relevant onboarding resources. Depending on the scope of the contractor’s job, you may need to equip them with:
- Employee handbooks
- Brand guidelines
- Training courses
- Software access
- Systems logins
Additionally, you should set up a meeting between the contractor and their designated contact within your company. That way, when questions arise, the contractor will know who to ask for support.
3. Managing Payments and Ensuring Compliance in Contractor Onboarding
Lastly, we come to the most crucial step in the contractor onboarding process: managing payments.
Understanding how to pay contractors is important because they form a distinct class from employees with unique financial and legal requirements. As such, there are several differences in how they’re compensated and managed. In general, contractors:
- Don’t require health insurance
- Don’t receive paid holiday
- Don’t have their taxes withheld
While you might think paying contractors would make things simpler, there are other hiring complexities to account for.
For instance, many countries have individual laws surrounding how and when workers must be paid. Hiring practices must take these factors into consideration. If you’re working with contractors from abroad, you must comply with these unique, ever-changing rules.
Depending on the circumstances, you may have to withhold taxes, report contractor earnings to the government, or pay consumption tax to your contractor.
To streamline compensation, adopt a reputable contractor management platform. These specialised platforms allow you to quickly and compliantly pay contractors globally.
4. Leveraging Automation for Onboarding Efficiency
Implementing a structured onboarding process creates efficiency for both the company and the employees. By employing contractor management software, your company can automate document workflows and compliance checks, easing the HR department's load and boosting productivity.
This allows greater focus on training and the personalised onboarding aspects, creating a smooth onboarding experience for contractors. Automated systems for payroll can simplify processes, ensuring timely and error-free compensation, thereby reducing administrative burdens.
Common Challenges in Contractor Onboarding and How to Overcome Them
Even with the correct contractor management tools, onboarding contractors can be complex. Here are the contractor onboarding and management challenges commonly faced:
- Insufficient onboarding resources – As a startup, you may have minimal training materials. But even massive corporations lack dedicated resources for contractors. To give your contractors the best shot at success, assemble and update your resources before bringing workers on board.
- Language difficulties – If you’re working with contractors from other countries, there’s a possibility your new worker may not have a native-level grasp of your language. Whenever possible, offer translated documents or an interpreter to ease the training process and make learning easier.
- Cultural differences – Different countries have different working cultures, and what seems second nature to you may not be obvious to a foreign contractor. Try to account for cultural differences by adapting your materials for your audience. Consider hiring specialists who understand international contractor needs and cultural sensitivities.
