Getting ready to bring independent contractors on board? Congrats! Your business will be enjoying specialized skills, fresh perspectives and flexibility—but only if you get your contractor onboarding correct.
You’re probably pretty well-versed in the employee onboarding process, but independent contractors require different considerations that can lead to some common mistakes. We’re here to cover:
- The ideal contractor onboarding process
- Common mistakes that might trip you up
- How technology can make the whole process more enjoyable for all parties
9 steps in the ideal contractor onboarding process
You’ve decided to bring on a contractor, your hiring manager found a stellar candidate, and you’re ready to get things rolling.
But before your new contractors can jump into their new assignments, everyone needs to jump through a few administrative hoops. Ideally, those hoops are outlined in a clear contractor onboarding checklist, such as the following:
1. Ensure proper worker classification. There are stiff penalties for misclassifying an employee and an independent contractor. Head them off by making sure your new worker is indeed a contractor (check out: International contractor vs. employee).
2. Finalize and sign the contractor agreement. A clear contract sets proper expectations for all parties and provides a solid foundation for your ongoing relationship. Make sure you cover the scope of work, compensation and payment terms, confidentiality statements, intellectual property and owners, and a termination clause. If you’re hiring international contractors, make sure to include any country-specific language and clauses, too. Many countries, including places like France, China and Mexico, actually require employment contracts to be written in the candidate’s native language.
3. Collect relevant documents. We’re talking tax documentation, legal documents, etc.—all the stuff you need to maintain compliance. For U.S. contractors (1099 contractors), you'll need a W-9 form. For international contractors, you'll want a W-8BEN form, proof of identity and right to work, and potentially a tax residency certificate (check out: 1099 for international contractors).
4. Complete background check. Not every company requires one. If you do, request it early and make sure you're following all applicable laws and regulations. Depending on the country you hire in, a background check may be required by the local government. These checks can help employers verify applicants' information, identify risks and ensure they are hiring high-quality candidates who meet business standards.
5. Set up payment systems. Don’t wait until you receive a contractor’s first invoice to set up your payment systems (a good way to disappoint a new contractor is via late payment). This is particularly important for paying foreign contractors, as you may need to set up wire transfers or explore other payment methods.
6. Provide access to relevant technologies. There’s nothing like getting a “you don’t have access” message or getting stuck at a login screen when you’re trying to get work done. Make sure your independent contractors have access to relevant shared folders and files, communication and project management tools, relevant technology platforms, etc. Create a list and make sure every box is checked before your contractor starts. Set up live demos of your technology platforms as necessary.
7. Set up orientation and onboarding sessions. No, they’re not full-time employees, but it still helps for contractors to understand your company culture, values, and policies and procedures. Provide this information in document form, then go over it together in a contractor onboarding session.
8. Introduce your contractor to team members. Good contractors want to work collaboratively, ask questions of the right people, and proactively fill gaps as they see them. But this is difficult when they don’t have a working relationship with their full-time counterparts and other contractors. A quick video call can go a long way in building rapport and fostering collaboration.
9. Start project work with detailed briefs. Set your contractor up for success with a clear set of objectives, timelines and expected deliverables. This is crucial to make sure your contractor understands exactly what you’re looking for in each project. It also helps you to feel confident that you’re getting added value from your contractor’s work. Because you can’t manage a contractor’s schedule, this final step ensures your projects will be completed by the necessary deadlines.
3 more steps for international contractors
If you're working with independent contractors from other countries, you have a few extra steps (don’t skip them!):
- Verify work permit requirements. Work permit requirements in the U.K. differ from those in France, which differ from everywhere else in the world. And what if your contractor is working remotely from another country? Make sure to review the requirements for your specific situations.
- Ensure compliance with local labor laws. Compliance is no joke, especially when onboarding contractors internationally. Will a U.S. contract suffice? Should your contractors get sick time? Can a contractor own stock options? Check out: Compliance FAQs for managing independent contractors.
- Address time zone differences. Communicating across time zones can be difficult, even within the same country. Set clear expectations about availability and response times, and encourage asynchronous communication.
7 common mistakes when onboarding contractors
While the contractor onboarding process looks fairly straightforward on paper, there are a lot of moving parts—which can lead to a lot of mistakes. The following are some of the most common when hiring contractors and bringing them onboard.
1. Failing to localize contracts
The contract protects both the business and the contractor and sets you both up for a productive relationship—as long as it contains all key terms and conditions. You might be tempted to use a generic online template, but compliant contracts are tailored to the specific labor laws of each country and worker. If businesses are careless with these contracts, they could end up with a permanent employee by accident.
For example, both the U.K. and Japan law automatically switch fixed-term employees to full-time after four and five years, respectively. This means the employee would be entitled to the same rights, benefits and protections as other international employees. It’s also important to remember that some countries like France are very strict with how fixed-term employment contracts are used.
2. Insufficient communication during the onboarding process
Contractors often report feeling "out of the loop" during onboarding, especially if they're working remotely. And being out of the loop translates to confusion, delays, and a sense of disconnection from the project or team (none of which is good for performance or retention).
The solution is to over communicate, especially at the start of the relationship. This is why it’s so important to introduce your contractors to their team members, provide access to communication channels (hello, Slack!), and offer official onboarding sessions.
You should also consider:
- Creating a "welcome packet" with key information about your company, the project, relevant team members, links to tools and technologies, etc.
- Scheduling regular check-ins
- Providing a clear point of contact for questions or concerns
3. Failing to provide localized HR support
Onboarding is more successful when your contractors have support available in their local language and time zone to resolve any questions or concerns. This is crucial for full-time employees, but localized support is just as valuable to independent contractors.
When you designate specific HR support for new contractors, they can quickly adjust to their new roles and contribute to the organization’s growth. At a minimum, consider providing onboarding materials in your contractors’ preferred languages.
4. Overlooking cultural differences
When you're working with contractors from around the world, it's easy to accidentally stumble into cultural misunderstandings.
For example, don’t expect all contractors to be working a 40-hour week. Full-time workers in Australia and France, for example, work 38 and 35 hours per week, respectively. Keep in mind that your contractor may not be working on non-American holidays (e.g. Boxing Day, Chinese New Year, Diwali). And definitely don’t forget to consider your contractors’ preferred currency for payment.
Consider investing in cultural awareness training for your team members who will be working closely with your international contractors.
5. Failing to set clear expectations
Missed deadlines. Scope creep. Disappointing deliverables. Without a detailed project brief that clearly outlines your expectations, you’re opening the door to all kinds of risks. Unfortunately, many briefs lack the specificity that contractors need to confidently deliver what the hiring manager actually wants.
To avoid this pitfall, create a custom brief for each project. It’s OK to start with a template, especially for similar projects. Just make sure you think critically about what additional information the contractor may need for each new assignment.
And don’t stop with the brief—spend some time talking your contractor through the project details so they can hear your expectations, too. This also offers them the opportunity to ask questions (and get answers) via video call or phone, which is often less ambiguous than written communications.
6. Deprioritizing the contractor experience
While most businesses work to create a positive employee experience, the contractor experience is often overlooked. But neglecting the contractor experience because they’re not FTEs is a significant mistake that can result in poor project deliverables and high contractor churn.
One of the most important ways to keep the contractor experience positive is to pay these team members on time, every time. Other ways to improve the contractor experience include:
- Regularly solicit feedback from your contractors and encourage them to ask questions. Schedule quick feedback meetings as part of the onboarding process (e.g. at the end of the first week, first 30 days, and first 60 days).
- Consider different learning styles and modalities—while some workers may like your PDF onboarding guide, others may prefer a Loom video or digital guided tour.
- Assign your contractor a buddy. Research from Harvard Business Review found that new hires with assigned workplace buddies were 23% more satisfied with their onboarding experience at the end of their first week. You can apply this learning to contractors, too. Buddies can help provide project context, boost productivity, and improve worker satisfaction.
7. Relying on overly manual processes
If you still onboard independent contractors using emails, spreadsheets and paper forms, you're making life harder for yourself (and your contractors). This manual approach is time-consuming and opens up each contractor’s onboarding to a multitude of human errors.
Did we ever get the background check back for Bob?
Did we ask for Jane’s W-9 form?
Has Joe been introduced to all team members yet?
You’ll find yourself searching your email and Slack messages to find the answers. And the larger your contract team, the larger the negative impact of this manual onboarding process. It’s far more reliable and efficient to implement a contractor onboarding technology that houses everything in one place and keeps track of everything for you.
The role of technology in better onboarding
Speaking of technology, using contractor onboarding software streamlines your process, ensures completeness and consistency, and contributes to a positive onboarding experience.
Key features to look for include:
- Automated document collection and storage
- Customizable onboarding workflows
- Integration with payment and project management systems
- Built-in compliance checks
- User-friendly interface for both HR teams and contractors
For example, Contractor Unity, the contractor payment platform by Safeguard Global, offers a centralized hub for managing the entire contractor lifecycle, from onboarding to offboarding. Onboarding with Contract Unity is fast and easy—you can set up contractors in under five minutes. The platform automates document collection, ensures compliance across multiple countries, and provides a smooth, professional experience for all users.
Moving forward, technology is set to play an increasingly important role in onboarding contractors:
- AI and machine learning will likely automate more of the process—and provide smarter insights.
- Virtual reality has the potential to revolutionize remote onboarding, creating immersive experiences for contractors in different locations.
- We're likely to see a continued emphasis on flexibility and personalization in onboarding processes, catering to the diverse needs of a global contractor workforce.
Onward and upward with your contractor onboarding
Successful onboarding isn't a one-and-done deal. It's an ongoing process that requires regular review and refinement. But with the right approach (and the right tools), you can create onboarding experiences that set your contractors and your business up for success. Ready to level up your contractor onboarding?
- Take a good, hard look at your current onboarding process. Are you missing any best practices? Making any of the mistakes? What could be improved?
- Consider how technology like Contractor Unity could help streamline your process and reduce errors.
- If you're dealing with international contractors (or planning to), make sure you're up to speed on the additional considerations and requirements involved.