Cassondra Batz-Barbarich, Steven Hunt, and Autumn Krauss, HCM Research, SAP SuccessFactors
Liz Supinski, SHRM Research
Navigating the legal landscape surrounding the use of an external workforce (e.g., contract, contingent, temporary, freelance workers) can be a significant challenge for organizations according to a survey conducted by SHRM and SAP of over 1,000 HR professionals, which found that managing the legal landscape was one of the top five challenges associated with the use of external workers. With the fear of perceived “co-employment” and risk of litigation looming over their heads, organizations sometimes take extreme measures to distinguish between permanent employees and external workers. Unfortunately, these extreme measures, while well-intentioned from a risk mitigation perspective, can result in companies and their leadership doing things that often make external workers feel unwelcome in the companies that are employing them.
The psychological term for this is “ostracism.” Ostracism occurs when a person’s innate need for belongingness is threatened when others ignore, dismiss, or exclude him/her, resulting in sadness, anger, and an attempt to remedy or protect this threatened need of belonging in some way. Extensive research has validated the negative consequences of ostracism at work, including lower performance levels, increased withdrawal, decreased levels of self-esteem, and even the physical sensation of pain. Clearly, ostracism is a state that organizations should strive to avoid for any and all employees – including external workers.
Unfortunately, ostracism is a serious issue impacting many external workers, as they struggle to be sufficiently accepted and integrated into the psychological and social environment of the workplace. A quick scan of Glassdoor uncovers troublesome accounts posted by external workers, all conveying feelings of being “less than” - being treated “like dirt,” “as sub-human,” “as outsiders,” and “as second-class citizens” were echoed across companies and industries. One contractor shared an experience of being told by a coworker that his ‘blue badge’ – indicating the status of a contractor – meant he had to wait until the permanent employees – or ‘red badges’ – exited the building during a fire drill.
These reviews, while startling, are not surprising, considering that company HR representatives have corroborated these concerning practices and acknowledged their concerns about them, as part of a joint research program being conducted by SHRM and SAP SuccessFactors on the external workforce. Interview and focus group participants commonly admitted that their legal departments specifically advised them to avoid inviting external workers to holiday parties and BBQs, including them in all employee meetings and communications, or providing them with free company benefits like flu shots. These practices can not only negatively affect an external worker’s experience and perception of the organization, but also their motivation and job performance.
Regardless if the organization is compelled to engage in seemingly arbitrary distinctions such as having external workers use a different email address, badge, or uniform, organizations can still alleviate the feeling of being ostracized by remembering four key points:
1.) Explain the rationale behind your policies. If your company’s interpretation of the legal context must lead to different experiences and rules for external workers, then clearly communicate what these differences are and acknowledge how they will impact the experience of the total workforce. Most people can accept that legal regulations may not always make common sense. If you feel legally compelled to treat external workers in a way that you dislike, make sure you tell them it is not your preference but rather what you understand to be a requirement by law. Show them the regulation that is driving your behavior so they know it is not something you want to do, but that you feel legally obligated to do. Further, when you actually review the regulations in more detail and consider their intention more carefully, you may discover that they are not as restrictive as you may have thought.
2.) Let them know you value them. It should always be communicated to external workers that they are valued by their coworkers, management, and HR to alleviate the sense of being an outsider or a non-contributor. Even if their value cannot be shown by receiving free lunches on the company’s dime or an invitation to the company holiday party, there are other ways to show appreciation, such as simple verbal displays of gratitude, inviting them to join you for lunch offsite, or even using your own “plus one” to have them join your company’s social events.
3.) Live your organizational values. So many organizations today aim to create an inclusive organization, and yet an organization cannot claim to be inclusive if they are treating their external workers differently. While often the focus of inclusion is on demographic-based differences, there can be less obvious differences within a workforce that need to also be considered when seeking to create a more inclusive environment at work – including the classification of workers. As such, to fully model the value of inclusivity, organizations must consider the treatment of not only men versus women and younger versus older workers, but also internal employees versus external workers.
4.) Remember your external workforce is part of your employment brand. External workers may have different contracts than internal employees and, in some cases, they might not even be directly employed by the company. Regardless, they are still executing work on behalf of the company and may even be acting as a representative of the company to customers. People support functions such as HR should view external workers as “customers” the same way they view internal employees as customers. Granted, they may qualify for different company resources and programs, but they still should be given respect and support. It should still be the role of HR to be an advocate for the best interest of all workers, including their external workforce, especially at a time when a company’s employment brand has become such an important differentiator to attract and retain (all types) of talent.
It can be confusing to differentiate between legal myth and reality when it comes to identifying what are actual important considerations when employing external workers, but what is clear is the organizational and personal negative impact of external workers feeling ostracized in the workplace. If companies rely on external workers to provide critical services, then they should also treat external workers as a critical and valued part of the organization.
This article is part of an extensive ongoing research program currently being conducted by SHRM’s and SAP SuccessFactors’ research groups on the challenges affecting the use and management of external workers including contractors, temporary employees, contingent workers, and freelancers. If you would like to learn more about this research program, including opportunities to participate, please contact Mitchell Ogisi from SHRM Research at Mitchell.firstname.lastname@example.org or Cassondra Batz-Barbarich from SAP HCM Research at email@example.com.