The ROI of Training Contingent Workers

Is it worth while investing money in contingent workers? If so, how much? If a contingent worker will only be on staff for two weeks and their level of responsibility is low, it follows that one’s training cost should remain as low as possible. By contrast, a worker brought on board for a short period of time who will have a high level of responsibility may be worth investing in. Deciding how much time and money to invest in training contingent workers, however, remains a challenge.

If we take for granted the fact that training – even if it is carried out informally (e.g., a one-hour tour of the workplace and general introduction) – is nearly always valuable, the question is not whether or not training should or should not be offered but rather how much organizations should invest in training contingent workers.

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To begin determining how much one should invest in training contingent workers, one needs to consider the following four variables:

1. Length of contract

On the one hand, it can more or less be taken for granted that the shorter the contract, the less one should invest in training. However, there are some notable exceptions. If an organization is hiring a contractor to help troubleshoot a reputational problem or to launch a new line of products, investing more money in training may yield a higher return on investment in the long-term. The same equation holds true when hiring IT professionals. While training may raise one’s initial cost and appear to delay the start up a specific project, in the end, spending more time training a new contractor may enable them to do their work more accurately and quickly down the line and subsequently, result in a higher return on investment. Thus, while length of contract is a consideration, a shorter contract does not necessarily need to translate into less training. Rather than focus on contract length, organizations are well advised to measure contractors’ relative levels of responsibility.

2. Level of responsibility

Measuring levels of responsibility can be a challenge but in general, one needs to consider the relative risk a contingent worker poses. If, for example, one hires a receptionist on a temporary basis and he or she is rude to clients, the cost is relatively low. While one may lose a client and irritate a few more, the overall damage will likely be something that can be easily mitigated (e.g., by sending a formal apology to the client or clients in question). By contrast, if one hires a solutions architect to help troubleshoot their computer network, the level of responsibility is much higher. Understanding how the organization works is also more essential to successfully carrying out the contracted work. A limited understanding or appreciation for the organization may prevent the contracted solutions architect from fully executing the work they’ve been hired to carry out. Worse yet, a failure to understand the organization may lead the solutions architect to recommend changes to the organization’s network that are not in the best interest of the organization over time. In this case, investing a bit more time and money into training a contracted worker may yield a higher return on investment in the end.

3. Potential Risk

Generally, the more responsibility is held, the more potential for short- and long-term risk. Of course, assessing risk is more complex. While an assembler or receptionist may hold limited responsibility and therefore only be able to do limited damage to an organization, these entry-level workers often arrive with less experience, less previous training and less formal education. In this respect, they may be considered higher risk than, for example, a solutions architect, network engineer, chartered accountant or senior communications professional who has been hired to carry out demanding work on the basis of their demonstrated track record and educational background.

4. Cost of training

Finally, there is the question of cost. It goes without saying that spending thousands of dollars training a worker who will only be on staff for a few weeks or months is likely not strategic. However, if neglecting training increases an organization’s risk, be it financial or reputational, one’s return on investment for training may still prove high in the end.