Do you value your ‘people’, but use and abuse your contractors and suppliers? Why does that matter?
In the nineteenth century organisations commonly believed that the command and control approach was the only way to manage people; business was no place for emotion. Employees were treated as little more than slaves by their employers and were worked as long and as hard as possible, for the least pay that the employers could get away with. There were just a handful of exceptions, such as Rowntree and Sunlight Soap, who built businesses on treating their employees very differently.
This attitude has not completely died out, some companies still believe that they have the best chance of being profitable if they exploit their employees as far as the law will allow. However, most companies, in the developed world, now recognise that this approach to management is fundamentally flawed.
Organisations are only as good as the people they manage to recruit and retain; it is their skills that drive the business success. Good people have their pick of employers and will avoid those that have poor reputations (which is now easy to establish through social media and sites like GlassDoor).
Motivated, valued and confident employees are also statistically far more productive than those who are stressed or demotivated and whose confidence has been knocked. No employee will stay if you pay them late. So, as an employer, even if you do somehow manage to recruit and retain good people, if you don’t treat them well, you will get a poor return on your investment.
In other words, like everything else in life, you get out of people what you put in. If you want loyal and hardworking employees, you need to treat them well. Economically (aside from morally) it makes no sense to treat employees badly.
This all sounds really obvious, you’ve heard it all before and even in those companies who don’t walk the talk, they will at least pretend to have taken on board this message. But in our modern economy, the teams at most organisations will include contractors and suppliers. These workers commonly have a special skill or capability that is not otherwise available within the time or budget constraints. How do you treat these people in your organisation? The best companies treat them with the same consideration as they would other employees. In return the best contractors queue to work for them and will deliver over and above what is expected of them. Everyone benefits.
However, too many organisations still think it is ‘good business’ to openly treat contractors and suppliers in a way that they know would be wrong with employees. These are the organisations who pay late, don’t say thank you for a job well-done or put the contract out to tender when the contractor has delivered well, ‘just to keep them on their toes’. They don’t include contractors, mentally or operationally, in the team, so contractors don’t understand how their role fits into the overall mission and how they might need to adapt in response to change.
It is strange to have to say this, but suppliers and contractors are people too. And like all people, they thrive and perform better if treated well. If the supplier or contractor sees that there is no loyalty or recognition for hard work, they won’t be motivated to do it. They will do the job they’re paid for and find another, better company to work for as soon as possible. Word soon gets around about good and bad payers, for example, and the only suppliers and contractors who will risk working for the bad ones are those that can’t get work elsewhere.
London 2012, Olympics delivered on time and in such a way that the Olympic governing body (IOC) regard it as a model of best practice. It was a good news story at a time when we’re more used to stories of projects going disastrously wrong, particularly in construction and IT. Why? Because it was a master class in contractors pulling together on a shared mission.
Treating contractors well is therefore just as important as treating your employees well, but I’m astonished at how many companies don’t understand the business sense of it. I was recently asked; “How do you manage to get Onyx employees and contractors to work late into the night to deliver on a tough deadline without even asking them?” The answer is obvious, treat good people well (whatever their contractual position) and they will repay you tenfold. That’s why, at Onyx, we believe in the partnership approach.