Human resource management systems and the professionals who run them are failing to manage a big percentage of their workforces.
This view comes from the admissions of senior HR professionals at a series of workshops and seminars I’ve attended recently.
Where they’re failing is in the management of self-employed contractors. This is serious, as self-employed people can now constitute more than a quarter of the workforce in large businesses.
There’s a transformation underway. The structure of firms and organisations has moved well beyond the familiar employment command-and-control pyramid. Firms are now hybrids of blended workforces, using both employees and self-employed individuals.
This confuses HR departments and others in management teams. The training, education and culture of management is structured around the assumption of ‘managing’ employees. This is what an MBA teaches.
Contractors are seen as transitory individuals without commitment to the firm. But a recent report blows away the cobwebs of mythology that surrounds the use of self-employed contractors.
The IPro Index is a five-year research effort from Monash University’s management department. It delves into areas that have been almost entirely untouched: the thoughts and attitudes of individual contractors.
With the support of the contractor management company Entity Solutions, Monash’s research head for the project, Tui McKeown, has been able to talk with many hundreds of individual contractors. This is a large survey size for this type of detailed research. The contractors are all high-end, professional, white-collar contractors. Tui has branded them IPros to distinguish them from other contractors.
This is a logical group to study. Despite the belief that contractors are mostly blue collar, most are in white-collar industries. These are the IT professionals, engineers, designers and the specialised skills people that seem to ‘float’ around most large organisations.
The research outcomes paint a picture of professionalism from contractors that any business would want to grab. These are people who display high levels of happiness and satisfaction in their work, with strong commitment to their clients.
Over 80 per cent of respondents report that they are proud of the work they do, feel happy when working intensely, are enthusiastic about their job and immersed in their work.
Ninety-eight per cent say they can usually handle whatever comes their way. The same number usually find several solutions when confronted with a problem, and they meet the goals they set for themselves in their work.
Two-thirds experience a sense of commitment to their client. A similar proportion of respondents feel their client supports and cares about them, and provides help when they have a problem.
The sense of professionalism shows through in their attitudes to meeting work and project goals, delivering prompt service. They are trustworthy and have their clients’ interests at heart. Over 97 per cent rate themselves performing on these attributes.
What comes through is quite a different picture to what I’d seen in the self-analysis at the workshops I’ve attended.
First, the common perception that contractors are not committed to their client/s and less bonded appears to be quite misplaced. The commitment is, in fact, high. It’s just that the commitment doesn’t come from some sense of legal tie (through employment) to the firm.
Rather, the contractor’s (or IPro's) focus is on the firm as their client. Perhaps this enables an even a stronger commitment than that given by employees – but it’s an unrecognised commitment.
Admittedly, I don’t have comparative data on employee attitudes with a similar white-collar profile. But any management concerns about contractor commitment should be put to one side.
Maybe this is so because HR managers and others in companies seem to be doing a pretty good job of looking after the contractors. There seems to be room for improvement. But there’s a probable link between contractor commitment and productivity and the willingness of clients to look after contractors. In fact, it’s quite a positive picture.
In my experience as a self-employed ‘consultant’ contractor with my clients, the ‘look after’ means the client responding to the issues I have that enable me to do my work. If issues are left unaddressed, I’m unable to do my work and my responsiveness drops off markedly.
In theory, the idea of firms being made up of contractors providing services are alien to the formal ideas and approaches taught to and held by management. The Ipro Index shows it’s not alien in practice.
Ken Phillips is executive director of Independent Contractors Australia and author of Independence and the Death of Employment.