Transitioning Employees into Contract Relationships—The Next Logical Step

Asher Black

The COVID-19 pandemic has changed the way we work forever. While the virus was the trigger for the rapid transition to remote work, it has also accelerated a process that was already underway – changing the nature of work relationships. The alignment between employee desires and employer needs is a once-in-a-lifetime opportunity to change the employment landscape. The next step is to transition employees into independent contractors.

Virtualized workplace relationships have become the new normal for all functions of an organization that don’t actually require a physical presence. The next logical step is transitioning employees into contract relationships. This process involves shifting a W-2 workforce to more closely mirror the flexibility inherent in client-vendor relationships. While this is fraught with issues that organizations haven’t yet solved, it largely requires the simplicity of utilizing a third-party corporate entity for accountability, liability, and maintenance of the contractual agreement.

Most organizations will start with one division, a handful of departments, or a particular set of previously localized functions. Wherever remote work has permitted still acceptable levels of productivity or even increased effectiveness with lower overhead, transformation has effectively already begun. It’s only necessary to utilize that momentum to finish the implied transformation.

Initiating a transformation involves defining your core team. In-house W-2 employment is most appropriate where there is no alternative to a professional’s physical presence, instant availability is required for operations, and certain pivotal roles where leadership must be arranged on the basis of exclusivity. Other functions are opportunities for shifting to an outcome-oriented, contingent, or contract-based relationship.

This is an unprecedented opportunity NOT to return to undesirable ‘normalcy’ based on a factory template that has contributed to traditional employment but also stymied organizations’ competitive and creative potential since the invention of assembly-line production. Instead, with so much productivity lost managing the ‘politics’ of the traditional office, shift the focus to rapid economic growth by building on top of any recent efforts at virtualization with flexible teams engaged in more agile work relationships around clearly defined missions and goals.

The impact of this shift is significant, but the actual process changes are straightforward. Most organizations already deal with multiple vendors, relying on consistency of outcome delivery and quality of work product. The success of the 2020 experiment in remote work, in which most of the business culture participated, implies similar success transitioning what is essentially a payroll designation to a flexible workforce model that more closely mirrors a vendor/client relationship.

In a flexible workforce™, W-2 employment is reserved for certain critical functions, while on-demand relationships become the norm for the company’s broader talent network. The result is an extraordinary competitive advantage and preparation for uncertainty. Organization leaders and investors are free to pursue new opportunities with fewer roadblocks to evolving, ongoing support of more precise talent requirements, greater resilience to shifts in marketplace demand, and smoother ability to respond to the emergence of disruptors.

In conclusion, the pandemic has given us a once-in-a-lifetime opportunity to transform the employment landscape.

At Free Agent Source Inc., we specialize in enabling the seamless transition of employees to contract relationships. We understand the complexities and challenges that come with this process, and we work closely with our clients to ensure a successful transition that benefits everyone involved.

Our approach is centered around direct communication and collaboration, so our clients have the flexibility and control they need to manage their workforce effectively. By leveraging our expertise and resources, organizations can achieve the benefits of contract relationships without the headaches and risks that come with managing them on their own.

If you’re considering transitioning your workforce to contract relationships, we invite you to schedule a 20-minute conversation with us to discuss how Free Agent Source Inc. can help. With our proven approach and commitment to client success, we’re confident we can help you achieve your goals and unlock the full potential of your workforce.

Asher Black

Asher Black

Asher Black is a co-founder of Free Agent Source and its Corporate Storyteller. As a consultant, his practice areas are Sales Effectiveness & Engagement, Education Program Implementation, Brand Story and Corporate Messaging. He often serves as a fractional leader, is a frequent public speaker, and media talent. He also lives in Brooklyn, plays guitar, writes fiction, and practices the martial arts.

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