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Contractor Nightmares (and How to Avoid Them)

Tags: Contractor, Bowman Inc., Avoidance, Joe, Recruitment & Selection, Tools & Techniques, Human Resources, Workforce Management, Management, Independent Contractor, NDA problems, employment contracts, Marie C. Baca

The contractor flakes. She wants more money. He fills the water cooler with vodka and sets fire to the copy machine. Okay, that last one is pretty unlikely. But believe us, plenty of serious headaches do occur when a company brings in contractors. So listen to David Bowman, CEO of human resources consulting firm TTG Consultants, when he says: “Do your homework!”

Here are five common contractor nightmares and ways to pre-empt them:

The Disappearing Contractor

Barring, say, kidnapping or homicide, there’s no good reason for a contractor to go MIA. But unfortunately, offsite contractors sometimes become uncommunicative, especially when they become overwhelmed by your project. Avoidance is just how some people react to stress. And you don’t want to discover the problem on deadline day.

Here’s where the homework (i.e., background check) comes in handy. Make sure this hasn’t happened with past clients. Don’t settle for one or two references. Bowman suggests you speak to five or six former clients. Ask how this person behaved under pressure, and find out what kind of pressure that was. Someone else’s high-pressure environment might not be enough for you.

The Greedy Contractor

You hire Joe Contractor to build a software platform for your HR department. Joe completes the project but then says he won’t train the staff in how to use the program unless you pay him double the originally agreed-upon sum. In short, he puts the squeeze on you. This sort of behavior would be foolish for any contractor looking to work again, but who knows? Joe might feel slighted by something that happened along the way, or by someone on your staff; or he might feel he got cheated in the first place.

As for you, what can you do? You don’t want useless software, so you might begrudgingly pay Joe the extra money, or try to strike a deal. If you’re in a real bind, Bowman says, you’ve got little choice. “You’ve got to be willing to negotiate,” he says.

That’s why the only really intelligent option is to create a protocol for dealing with unforeseen unpleasant situations in the original contract. (As we said earlier, it’s worth paying a lawyer to handle the paperwork.) Yes, yes, you hate envisioning worst-case scenarios in the early stages of a relationship with a contractor who seems like the ideal person to save your bacon. But it sure beats finding yourself with no choice but to give in to a shakedown.

The Culture Vulture Contractor

This isn’t the contractor who is obsessed with Puccini. No, this is the individual who poisons your culture, often by unprofessionally interacting with full-time employees or behaving in a way that’s disruptive.

“Any time you bring in new people, the culture is going to morph a bit,” Bowman says. “Hopefully it reverses itself, but if it doesn’t, you’ve got to address that negativity before it turns into an even bigger problem.”

The strategy, he says, is to immediately talk to the contractor and discuss what changes can be made before the atmosphere worsens. If you discover that the problems stem from one particular person, the solution is simple: Fire that person, and move on.

The Blabbermouth

Most employment contracts have nondisclosure agreements, or NDAs. In theory, they contain unambiguous language that outlines what an individual is and is not allowed to share with competitors, the media, or, for that matter, anyone. But often NDAs can be subject to interpretation and, more important, can be difficult to enforce. Even if they’re not, few companies would take legal action against a contractor unless that person leaked information that seriously damages the company.

When problems arise, Bowman says, it’s usually not because of the moral turpitude of the contractor. Instead, it tends to happen because management isn’t clear enough about what information is sensitive and how it should be handled. Here, too, the key is to very clearly spell out the responsibilities regarding company information so that there’s no question about what’s inappropriate. Consult a lawyer about the NDA’s language, but also discuss the issue carefully with your prospective contractor.

The Laggard

Everyone fears this type: the contractor who repeatedly asks for deadline extensions even though the project’s requirements haven’t changed. Bowman’s solution: Create benchmarks so you can evaluate progress along the way, avoiding any shock when the due date comes around. “You want to be able to sit down with the contractor at various points and ask, ‘How are we doing in comparison to our plan?’ ” Bowman says. If a contractor is creating a 200-page report on the competitive landscape, for example, you could require an executive summary the first week, the first 50 pages two weeks into the project and so on. If the contractor fails to meet early deadlines, address the problem then: If your expectations were unreasonable, renegotiate the timeline. If not, hire someone else.

 
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    1

    jburkepe

    08/18/09 | Report as spam

    RE: Contractor Nightmares (and How to Avoid Them)

    Sometimes its hard to believe that there are people out there like this (hopefully each example was representative of different people - I'd hate to see a single individual engage in all of these at once). On the other hand, I think it's fair to pause if you really think your contractor seems to fit any of these descriptions. The one that stood out the most was the "Greedy Contractor". All I could think was that it could have been so easily prevented with a good contract.

    It's reasonable to think that if your contractor is being fairly compensated and the relationship remains on good terms, it may be quite possible to get some additional work done without additional charges. But the example you provided - of requiring training on top of the software development - makes me cry "foul". If indeed the contract did not include such a scope, it is completely within the service provider's right to ask for additional compensation for such a substantial extra piece of work. This is not to say that a good contractor wouldn't bring this up at the beginning (of course, how can you use software you haven't been trained on), but nevertheless should not prompt a quick rush to a judgment of "greedy".

    http://pmug.wordpress.com/2009/04/13/project-contracts-conflicts/

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    2

    trustinhim2009

    08/18/09 | Report as spam

    RE: Contractor Nightmares (and How to Avoid Them)

    In my experience with contractors, I have had good contractors that we used over and over, and I have had contractors that bring one guy to the jobsite to clean up and move around to make it look like he is progressing. California construction sub-contractors can not abandon a jobsite for more then forty eight hours, or else they can be legally fired. Well I do not consider a clean up guy job performance for three consecutive days. His performance stop the day he sends a clean up guy, and I patiently waited for more than five days before I fired him. If he sends a clean up guy, then he comes back to continue working on the project, I would have been okay with it. I always have a back up plan, the next bid for the job, or a new set of bids with in two days. I request information from the contractor via e-mail for five consecutive days to have written proof, and after the third day, I send a legal termination notice that requires for him to comply with in the next two days. In the mean time I have contractors estimating the project. I have a budget and a time line. It means that he gets fired, or I get fired. Who do you think I will choose? That is right I will choose the flaky contractor to get fired. I was able to finish a quarter million dollar kitchen on time.

    Luis Lago

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    3

    ncolarossi

    08/19/09 | Report as spam

    RE: Contractor Nightmares (and How to Avoid Them)

    Speaking as a contractor, there are situations like this that occur. Contractors don't show up or do what they are suppossed to. It is very important to be on the same page always. Make sure both parties have the same end result in mind. As the contractor, it is very important to follow up and communicate with the owner on a daily or regular basis to communicate any issue that may cause the project to run behind or cost more. Unfortunately even a thorough estimate may not reveal unforseen issues that come up during the project process. Also, as a customer, make sure you are available too. I know we are all busy these days, but I know I have shown up to estimate projects and no one is there, everyone's time is expensive. It is important not to waste it

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    4

    The1AndOnlyJac

    08/19/09 | Report as spam

    RE: Contractor Nightmares (and How to Avoid Them)

    My past company hired a contractor to do some specific work for a customer of ours (we were an IT consulting firm). The contractor we selected had specific knowledge of the end users industry, and was very well prepared for the interview. While the background check hadn't come back yet, he was a shoe in. In the short, we thought we had lucked out.
    That was until our first meeting with the customer bringing the contractor along. We introduced him and started discussing additional project details. 20 minutes later, the customer silently flags our attention and points to the contractor, who was in asleep in his chair. We promtly woke him, and his responce was "Whats going on?" He clearly had no idea where he was or what he was doing. His drug use the night before rendered him useless to us, and we swore we were on a hidden camera show.

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    5

    Coachmiriam

    08/19/09 | Report as spam

    RE: Contractor Nightmares (and How to Avoid Them)

    Be wary of contractors who offer too good a deal, and resist overgeneralizing from one bad experience. A friend's firm hired their first executive coach, who underpriced their services in exchange for doing beta work. Said contractor split when a better-paying client showed up. This one experience unfortunately soured my friend's firm on hiring coaches altogether.

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    6

    Gray Horse

    09/20/09 | Report as spam

    RE: Contractor Nightmares (and How to Avoid Them)

    And Now The Rest of the Story...

    Companies frequently use Contractor (or "Third Party Providers") status to gauge and evaluate new hires. I applied for a posted position within a Fortune 100 company, interviewed, and was offered the position on a "temporary" 6 month probationary period to see how we both felt about the position and culture of the company...

    Fast forward 2 years...
    I have survived 3 separate "re-engineering" waves, have contributed to both operational and strategic programs and have the respect of many of my peers both in and out of my team. I have positioned myself as a "go to" person in my commodity. In short, everything that was expected from me and more.

    Problem is...I'm still a Contractor and my direct leader keeps blaming the economy, corporate head count restrictions etc...for being unable to hire me on staff. However, now that I have been in this position for two years, I am rapidly approaching the time line within the company to move onto somewhat different responsibilities.

    In the last 6 months, I have had my hourly wage cut by 15%, have had my both my transportation and family's health care costs go up 20%...now he tells me that if I were to go on staff, I would be forced to accept an even lower band level salary...

    At the same time, our company has continued to hire B-School graduates at higher starting salaries, who come with a lot of biz-speak, vague strategic concepts and value creation and generally, a lower commitment to excellence, than I have shown.

    So before you categorize Contractors as "Nightmares" waiting to happen, consider that some Contractors are human beings too...not simply disposable human assets, to be used then discarded. Companies still have ethical responsibilities...a concept that hasn't gotten to the C-level. When the economy turns around (and it will), companies that have taken advantage of their workforce are going to experience valuable talent migration.

    Before this downturn, I worked 27 consecutive years in increasingly responsible positions...now that I am at a disadvantage... the B-school boys are making sure they give it to the most vulnerable good...

    Thank God for strategic management consultants...like seagulls they can S**T on people and just fly away...

    Maybe Ms. Baca should do a similar story on this category characterizing Consultants as nightmares...

    Think about the damage they can do to an organization...

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