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An Employer's Guide on Contractor Onboarding

Updated on :

February 20, 2024
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An Employer's Guide on Contractor Onboarding

Companies looking to achieve greater business efficiency or scale quickly generally opt to hire independent contractors. While contractors are a great asset to any company, employers may often overlook their onboarding process. 

Establishing a structured contractor onboarding process within your company becomes crucial for quick and efficient hiring. Understanding the know-how of this process, taking the right steps, and having a comprehensive checklist can make the process structured and seamless. 

If you are looking to fill these gaps in your organization, our contractor onboarding guide will help you get started. 

What is Contractor Onboarding? 

Contractor onboarding is the process of making new contract-based hires a part of your organization, including drafting contracts, providing access to tools, employee training, etc. 

Hiring independent workers is a little different than hiring full-time employees. Most companies have a structured approach to employee onboarding. Employers and the HR department work together to set work schedules, salaries, benefits, taxation, etc., for their full-time staff. 

What is Contractor Onboarding? 

When processing freelancer onboarding, the procedure becomes flexible. They have the autonomy to manage their work, often leveraging their unique skills to tackle specific projects efficiently. This flexibility is valuable for employers seeking short-term solutions and contractors who enjoy the independence and the potential for higher income. 

Let us understand why a contractor onboarding process is necessary for any organization.

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Importance of an Effective Independent Contractor Onboarding

A well-structured independent contractor onboarding process can lead to a smoother experience for these workers. It enhances project efficiency and quality, making it a win-win situation for contractors and employers. Here is why you should consider having an effective contractor onboarding in your company:

1. Saves Time

While in many companies, permanent hires go through a carefully planned onboarding process, independent contractors go through an unstructured one. If a company heavily relies on its contractors, ensuring they are enrolled in your company effectively is essential. A step-by-step process saves time. 

2. Cultural Assimilation for Better Outcomes

An unreliable onboarding process can make your contractors feel left out of your organization's mission, goals, and culture. 

A seamless contractor onboarding helps with cultural assimilation, making the freelancers feel their work and contributions matter. Contractors feel motivated when employers answer their queries, give them the required training and support, and consider their feedback.

3. Easy and Organized Process

When you have a robust process for contractor onboarding, you can easily replicate it for several contractors. Depending on the hiring location, you may need to make a few changes according to the legal or taxation landscape. But it is always better when you don't have to start from scratch, especially when opening offices in different locations. 

A standardized process makes the recruitment and onboarding easy for everyone involved.

How to Onboard a Contractor?

Your contractors should be able to understand the organizational process, their roles and responsibilities, payments, work, etc., with guidance from your hiring team. Follow this step-by-step guide to create a systematic contractor onboarding in your company.

1. Involve Departments Across the Firm

Whenever you hire an independent contractor, several teams often need to be involved in the process at different levels. It could include your legal, HR, IT, payroll, and other teams. Make sure that there is inter-departmental communication about the contractor onboarding so you can save time and effort in the hiring process. 

Having information on what kind of external workers are already a part of your company, who manages them, whether there are any new requirements, etc., can be highly effective.

2. Understand Job Requirements 

You should clearly understand the scope, role expectations, deliverables, performance measures, skills, and competencies to enable smooth onboarding. It reduces the possibility of any confusion around tasks, expected work quality, the evaluation process, and other important parameters contractors should know.

3. Prepare Project Onboarding Documents 

Onboarding independent contractors can be a tedious task. Employers should prepare all the necessary onboarding documents for accountability, record-keeping, and legal purposes. This includes formalities related to project plans, role-specific guides, tool licensing, tax forms, contract agreements, and several others. 

Keeping this list handy and paperwork ready saves hours of work, and you can easily manage this on a bigger scale.

4. Classify Contractors

One of the most critical steps while onboarding independent contractors is their classification according to local laws. It is crucial to understand that while engaging a contractor, whether you are hiring a part-time employee, a freelancer, a remote worker, etc. Failure to classify your workers correctly could lead to compliance and legal risks, inviting scrutiny, fines, and more. 

5. Sign the Contract

When you onboard contractors, ensure you have contract agreements that cover work and company-related aspects. These include scope of work, payment models and schedules, dispute resolution, termination, etc. All the parties involved should review and discuss the clauses to avoid miscommunication or misinterpretation. The better the transparency around the contracts, the stronger the trust foundation. 

6. Gather Contractor Details

Once all the legal documents have been duly signed, you must add the independent contractor to your company's database. Collect information such as their full name, contact number, bank information, permanent and residential address, and other important details according to your company policies. You may also want to gather their portfolio, resume, professional certificates, and other documents that support their professional experience. 

7. Update Your Payroll Team

It is well-known that the freelance economy faces challenges in receiving timely service payments. The reasons are plenty, such as the lack of robust contracts or assessment of working hours. 

For effective contractor onboarding, make sure you have the right payment process in place with the correct payment details. You also should be extremely careful with this process if your workers reside in other countries. Try to automate the payment process using a payment portal or onboarding platform to save time and effort and avoid any mistakes.

8. Carry Out the Tech Onboarding

Your contractors will require access to certain systems, software, and tools all your team members need to use. They may need information stored in protected documents or databases. You may also need to add them to communication channels such as MS Teams, Whatsapp groups, or Slack. This ensures your contractors don't face tech blockers when the project begins. 

9. Initiate Project Onboarding

This step is critical in determining the success of the projects you hired contractors for. You must brief them about the project's background, goals, and expected outcomes. Make sure the contractors have clarity about their responsibilities and performance indicators. Cover any knowledge gaps through adequate training and other resources. Introduce them to the appropriate stakeholders and team members they will work with frequently.

10. Check-in and Feedback

Organize check-in and feedback sessions to improve your partnership with independent contractors. Scheduling such sessions periodically and using them to resolve challenges contractors may be facing, provide feedback, and recognize their contributions. Encourage a collaborative environment for continuous improvement.

Checklist For an Effective Contractor Onboarding

For long-term success in working with independent contractors, you must significantly improve the onboarding process. Maintain a contractor onboarding checklist and refer to it whenever you need to hire these workers for your company. Here are a few items to include in your list: 

  • Contact Information: Make sure you have all the necessary and verified contact details of your contractors. It will be of utmost importance in tax records, payroll processing, and communicating with them.
  • Tax Documents: You may need to gather specific tax details such as tax ID or social security number to comply with local tax laws.
  • Legal Agreements: It is crucial to safeguard your company's data and privacy, especially when working with independent contractors. Maintain legal agreements such as a project contract, intellectual property (IP) agreement, non-disclosure agreement (NDA), confidentiality agreement, etc. to protect proprietary information.
  • Internal Resources: Provide the independent contractors access to required documents, databases, and tools. Add them to communication channels for timely project updates, resolving urgent blockers, and sharing any important information.
  • Contractor Handbook: Independent workers often find it difficult to resolve their queries in time or understand their roles. Create a one-stop resource guide from which they can learn more about the project, company policies, necessary tools, etc. 
  • Check-in and Feedback System: You cannot achieve a smooth onboarding unless you receive honest feedback from your contractors and improve the process. Organize regular check-in and feedback sessions, identify the gaps, and optimize the process accordingly.

Manage Your Global Team With Skuad

When onboarding international contractors, employers should consider creating systematic checklists and onboarding processes for a smooth work environment. This process, however, can be complex and time-consuming. 

With Skuad, you can hire, onboard, and process payments of full-time and independent contractors across 160 countries without setting up a legal entity. Skuad enables companies to work with independent contractors and freelancers compliantly and seamlessly. Book a demo today! 

FAQs

How do you welcome a contractor?

You can host a welcome session and invite your contractors to discuss the onboarding process, project scope, company policies, and other important things they need to get started. Share the project goals and the company's mission and vision to make the contractors feel included. Ask for their feedback and resolve any queries to ensure they do not face any challenges as they offer you their services.

What makes onboarding effective?

A successful contractor onboarding process entails setting clear expectations, providing tech and project onboarding, fostering a supportive work environment, and conducting timely check-ins, among many other critical aspects. 

About the author

Sandeep Patel is a Content Marketing Manager and Strategist. Over the last five years, he has created and managed content for global brands and fintech startups. He is passionate about remote work and using tech for a better work-life balance.

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