3 Ways to Manage Contractor Turnover

Contractor turnover is a persistent challenge in many industries, and the costs associated with recruitment and training can significantly impact a company’s bottom line. Beyond financial implications, high turnover rates can also disrupt project timelines, influence team dynamics, damage client relationships, and hinder overall business growth. By understanding the factors contributing to turnover and implementing effective retention tactics, businesses can build a more stable and productive contractor workforce. Below, we explore three ways to manage contractor turnover. 

Factors Influencing Turnover

Contractor turnover is a silent yet potent threat to business success. The constant cycle of recruiting, hiring, training, and onboarding new contractors can drain resources, disrupt projects, and erode overall productivity and project success. To effectively address this challenge, it’s essential to understand the underlying causes. Common factors include: 

• Inadequate pay, lack of benefits, minimal training resources, and limited growth opportunities can push contractors to seek employment elsewhere. 

• Poor project planning, unclear expectations, disorganization, and ineffective communication can lead to job dissatisfaction and burnout. 

• Demanding project schedules and a lack of flexibility can negatively impact contractors’ personal lives. 

• Contractors often seek stability and long-term opportunities, which can be lacking in certain industries or companies. 

Once you’ve identified the primary factors driving contractor turnover in your company specifically, you can implement targeted strategies to improve retention and project continuity. However, as turnover is inevitable, we outline some ways to manage contract turnover to the best of your ability. 

Ways to Manage Contractor Turnover

1. Build a Talent Pipeline

Having a pool of pre-vetted contractors is essential for swiftly addressing gaps that arise due to turnover. When key positions become vacant, having immediate access to a roster of qualified candidates can significantly reduce downtime and ensure you’re meeting the client’s needs for that particular project.  

One effective way to do this is by networking. By attending industry events and engaging with professionals in your field, you can establish connections with potential contractors. At these events, you will likely meet individuals who are not actively seeking new opportunities but could be interested in contract work one day.  

Another option is to form a partnership with a staffing agency. These agencies often have extensive databases of pre-screened candidates, allowing you to quickly find the right fit for your needs. BCTG, for example, has a vast network of pre-vetted candidates ready to serve our clients across the IT sector. We also have a referral program in place, encouraging current contractors to recommend qualified candidates. This ensures a continuous influx of skilled professionals, ready to step in whenever and wherever needed. 

2. Create a Knowledge Transfer Plan

If a contractor does decide to leave, a knowledge transfer plan can ensure that critical information is passed on to the incoming contractor or existing team members. A key element of this plan is the documentation of work, meaning contractors should be diligent in maintaining detailed records of their contributions, including code, designs, customizations, and any modifications made. This helps the incoming contractor or existing team members understand the current state of the project and any specific nuances. Transition meetings between outgoing and incoming contractors can also provide an opportunity to discuss ongoing tasks and future plans for a seamless handover. With a solid plan in place, organizations can maintain productivity and project momentum even during periods of transition. 

3. Conduct Exit Interviews

Finally, an often-overlooked way to manage contractor turnover is by conducting exit interviews. Many companies are missing out on precious feedback and opportunities for growth, with a Harvard Business Review study finding that when executives were asked about programs that resulted from their company exit interviews, fewer than one-third could cite an example. 

These interviews provide insight into why contractors are leaving and how your organization can minimize turnover, so, during these interviews, it’s essential to focus on understanding the primary reasons for the contractor’s departure. This could range from personal reasons to job dissatisfaction or better opportunities elsewhere. By pinpointing these reasons, organizations can identify patterns or common issues that may be affecting contractor retention.  

Contractors often have unique insights into the day-to-day operations and can offer practical recommendations for improving communication and fostering a more collaborative atmosphere. Don’t let this opportunity go to waste; these suggestions from exit interviews can lead to meaningful changes that enhance the overall work experience for both current and future contractors.  

Looking Ahead

Managing contractor turnover is a complex issue that requires a multifaceted approach. By intentionally managing it from the beginning and carefully analyzing the reasons behind turnover, businesses can significantly improve project outcomes and build stronger partnerships with contractors. Remember, investing in your contractor workforce is an investment in the long-term success of your business. 

To continue the discussion, connect with experts at BCTG.