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Contract Work Is Hard. These 6 Rules Make It Easier.

Small business tips

9 min read

Contract Work Is Hard. These 6 Rules Make It Easier.

Tips for making the most of contract work for both freelancers and employers

By Charles Smithson · April 29, 2019
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Switching from one job to the next is the nature of the beast for freelancers and contractors. And that means a unique set of challenges, like making quick assessments and moving projects forward on schedule despite juggling multiple clients. On the other side of the coin, businesses working with contractors have their own obstacles—from unreliable partners to legal issues.

When contract work is successful, it benefits both parties: The freelancer has money in the bank and a new recommendation to boot; and a business can maintain a lean structure without sacrificing quality. But when a contract goes sideways, everyone suffers.

Here we'll outline six ways freelance relationships typically go off the rails—and how you can keep things on track, regardless of which side of the equation you're on.

Clear Up Hazy Expectations

Clear expectations are the cornerstone of any project, but they're particularly important when it comes to contract work, since both parties are looking out for their own interests. When the particulars of an arrangement aren't defined, the foundation of the relationship can fall apart.

For contractors

Be sure to get in writing important logistical details, like the duration of a project, how many hours per week or month it will require, and the final total compensation. When you work for yourself, you need to know where your income is coming from and how often you'll be paid.

Also be wary of providing an estimate without fully understanding the quality requirements. For instance, if you're designing a website for someone, be sure you know what kind of graphics they'll require—can you use stock photos, or does it need to be original artwork? Things like that will change your estimate and make sure everyone's on the same page.

For businesses

An organization in need of outside help is typically anxious to find it, and an independent contractor with availability is eager to work. But you need to be patient as you search for a contractor. There's value in paying a fee for a thorough consultation and project evaluation before even hiring a contractor for the full project.

Do what's necessary to determine all relevant details, including the range of dates and potential extensions, budgets, hours and overages, and any other information that requires consent from both parties before signing a contract and committing to the work.

Sign a Contract

It seems simple, but you'd be surprised how many freelancers and business enter a working relationship without a contract. Bottom line: don't do it.

Vector image of a contract

For contractors

When you're moving from one project to the next, there's an added layer of complexity. Not only do you need to track down and procure new clients on an ongoing basis, but you also need to manage the quirks and demands of multiple bosses and organizations. For most people, answering to just one demanding manager is more than enough to keep you on your toes. The best, and sometimes only, protection you can have in a temporary work relationship is a contract that lists all of your primary duties and expectations and includes details on financial compensation, the range of dates, and any other relevant factors.

While a larger organization can absorb the impacts of an unpaid bill or the occasional overbearing or abusive customer, the effects of such issues on an independent contractor can be devastating. What will happen if your employer moves to terminate your position early, asks for a scope of work above and beyond the original request, or in some other way bends or breaks the fundamental rules you established?

Even notes and documented emails are rarely enough to rectify the situation in your favor. You need that legal, signed document to back it up.

For businesses

For the organization hiring outside help, a contract is just as imperative, protecting the employer from unsatisfactory performance, padded billing, and missed deadlines. While in most cases, the legal document need not be exhaustive, it should cover the basic parameters and a broad range of possibilities. Whether you're using an agreement created by the freelancer or a standard document drawn up by your company's legal team, consider covering payment structures, ownership of work produced, and scheduled extensions, as well as exclusivity or non-exclusivity clauses, kill fees, and responsibility for indemnity against future loss.

And remember, contracts are genuinely beneficial to all parties involved, so your freelancer should be happy to sign—if they're not, it's probably a sign it's not a good fit.

Here's a guide on How to Draft a Freelance Contract Agreement to help get you started.

Avoid Communication Breakdowns

Communication is key to any working relationship, but it's much easier to lose track of that communication in a contract work situation. You're usually not face-to-face with each other, and there are likely fewer status updates than you'd have from your coworker. That's why you need to go out of your way to increase communication.

For contractors

The most common source of communication-related frustration for a contractor is waiting. Whether you're waiting for a resource, feedback, or approval, the pace of work is bound to suffer if you can't move forward with the project. That can make it harder for you to meet your deadlines, but it also makes it hard for you to juggle your other projects: If you've budgeted time on a given day for this project but you don't have what you need to move forward with it, it can affect all of your work—not just this one contract.

Contractors typically aren't afforded the same standing or inclusion as full-time staff. There are barriers to how and when they can contact various people or resources—even if located on-site, but especially when working remotely. The dynamic of continually reaching out to folks by email or on the phone and not getting a prompt or complete response is draining, to say the least. On the one hand, it's something you'll need to deal with. But there are ways to help avoid it:

  • Include a "timeliness" clause in your contract. That is, make sure you have in writing—and signed—that your client will provide you with feedback, resources, or approval within X days of submission.

  • Be sure you have more than one contact at the company, so if your main contact ghosts you, you have backup.

  • And, of course, if it becomes a consistent problem, don't work with this client anymore. It's unlikely they'll get their act together.

For businesses

Do your part to be sure you're keeping the lines of communication open for your contractors. You don't even have to go out of your way to do so—you can invite them to specific channels in your Slack workspace, which requires no extra effort on your part but lets them get in touch when they need to.

Of course, you're not only doing this for the contractors' benefit. There is such a thing as an unreliable contractor, and if you don't check in early and often, you give them a chance to fall well behind schedule. Using a database like Airtable or even Google Sheets to keep tabs on all the contracts you have in place will help you be sure everything's on track. In many apps—or using Zapier—you can even set up automated reminders if a project is overdue or a milestone is coming up that you should check on.

Don't Misrepresent Qualifications or Scope

When it comes to contract work, there's a lot of trust involved. And the first step in building that trust is by being honest about your qualifications or the scope of the work to be done.

Vector image of one candidate being selected from a group

For contractors

If you read an interesting job description or hear about a quality opportunity, it's natural to want to make the shoe fit, even if it might not be quite right for you. Sure, you can get up to speed on a lot of skills with some help from Google and YouTube, but masquerading as a specialist, claiming to have software skills you don't, or representing any other talent that's outside your expertise is a recipe for failure and embarrassment.

There's a reason businesses put those qualifications and requirements in the description of work—because you need them. Make sure to properly read those requirements. Whether you're a seasoned professional or just getting started in the business, it's important to understand your core strengths and competencies, as well as areas you can relatively easily compensate for on the fly. You'll enjoy the work more and be able to get more bang for your buck if you're able to complete projects efficiently—and you can't do that if you're constantly scrambling.

For businesses

Many human resource departments today take the more-is-better approach when listing required skills, qualifications, and responsibilities. And while you want to be sure you're finding excellent candidates, you also want to be sure you're attracting the right type of candidate. It's unlikely you'll find someone with all 28 of your required qualifications, which means that people applying might be padding their resume a bit.

Employers help themselves by being more realistic in their search, drawing the line between desired and required. Put forward the essential attributes of the ideal candidate, and focus on what's necessary to get the job done right. Make sure the freelancer knows what skills they truly need, so they can make a proper assessment about whether they're cut out for the job.

Agree on Fair Compensation

If either the company or the contractor doesn't feel comfortable with the compensation, it's a recipe for a bad working relationship—and a bad end product.

For contractors

Especially when you're just starting to build a client base, setting rates can be a challenge. You're hungry for opportunities and wish to be fairly compensated, but you're also nervous about losing out on a contract or only being hired for a limited scope of work. This underlying trepidation can result in quotes coming in too low, which will leave you unmotivated.

As a freelancer, it's essential to have confidence in your ability and recognize the value you bring to the table. When calculating your rates, take into account the time it takes to acquire clients, provide estimates, draw up contracts, and keep your business organized while managing invoicing, schedules, and myriad other considerations. It can be tempting to find a comparable salary for the full-time employee equivalent and divide it by 52 to get your weekly rate, for example. But remember: Full-time employees are getting loads of benefits that you're not, including everything from sick days to 401ks. You need to account for the cash you'll need to get health insurance, take time off, and everything in between.

For businesses

The value of working with freelancers shouldn't be lost on the organization looking to access quality talent on an as-needed basis. You aren't paying health insurance, contributing to a 401k, or offering three weeks of paid time off each year. You're not even absorbing those inevitable hours every week lost to casual conversation and other obligatory idle moments that are part and parcel to everyday employment. Outsourcing also reduces overhead, requiring less office space and equipment. And if you don't like the way things are going, depending on the contract, you can let contractors go with virtually zero repercussions—and don't even have to pay unemployment.

So when negotiating a fair rate, keep in mind all those value-added variables. A talented and reliable contractor usually commands a higher base hourly rate than a full-time employee in the same position. If you try to compare apples to oranges, it may seem like a contractor is being unreasonable, but usually that's not the case. And if it is, then you are under no obligation to agree to their fee.

Prioritize Onboarding

In an ideal world, a contractor can jump right in and hit the ground running, but just as that's not the case for employees, it's also rare for contractors.

Vector image of file in folder

For contractors

You'll likely have to perform a lot of behind-the-scenes legwork detailing the project specifications and development. You need to take time to learn who's responsible for what within the organization, how your role fits in, and where you can access necessary resources. All of this takes valuable time, but it will make the meat of the project much easier.

When coming up with an estimate—both for payment and time-to-complete—be sure to include some time to familiarize yourself with the organization, personnel, and specific project. And if you feel like your client is rushing you for a deliverable, be sure they understand exactly what's holding you up and why you're getting your sea legs first.

For businesses

Having an organized onboarding process and providing the small and large details to get temporary hires up to speed will make for a more serendipitous arrangement for all.

There are specific laws (that vary by state) about how much training—if any—you're allowed to give contractors, so be careful about that. But any information you do need to give the contractor should be provided upfront so it doesn't disrupt the workflow down the line.

The most important thing to remember when establishing a working contract relationship is that both parties should assume the best intentions in the other. As a contractor, you may not get an invite to the annual holiday party, but that doesn't mean the organization doesn't value you. And as an employer, you might feel put out when a contractor requests a rate you feel is unreasonable, but remember that they are basing their rates on what they need to make a living. Foster a culture of respect—just like you would in an employer-employee relationship—and you'll be set up for a successful contract.

Contract image and image of file in folder designed by / Freepik. Candidate selection image designed by Freepik.

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Charles Smithson picture

Charles Smithson

Charles Smithson is a writer and business owner out of San Diego with over 20 years of experience working with contractors and teams. He is passionate about helping people make the most of their business and reach their professional goals.

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