A More Ethical Approach to Employing Contractors | Harvard Business Review

Workforce Trends

Many organizations rely on external contributors, such as contractors, to meet their work needs. According to a recent article by the Brookings Institution on workforce ecosystems, external workers can comprise 30-50% of an organization’s entire workforce. As this trend continues, organizations must understand the benefits and risks that contract work presents to both them and contract workers. With this as the backdrop, this new HBR article offers ideas for organizations to consider. One risk is that contract workers often perform the same work as their directly employed counterparts, but they do so for lower pay, reduced benefits, job uncertainty, and fewer protections. Additionally, misclassifying workers as contractors when they should be classified as employees can lead to legal, reputational, and financial consequences. To mitigate these and other risks, six standards are proposed for organizations to adopt: 1) providing family-sustaining wages and benefits, 2) ensuring equal pay for equal work, 3) implementing workplace safety protocols and worker voice, 4) demanding equitable procurement practices, 5) offering pathways to full-time employment, and 6) being transparent about responsible contracting efforts. As a bonus, this supplemental 14-page PDF provides more information on these six standards.