There is a common assumption among management researchers, and indeed among managers themselves, that it’s just not worthwhile for firms to train contract workers – especially ones with flexible arrangements like freelancers or direct sales reps.

The thinking usually goes that because these workers can easily leave, they’ll take that expensive training with them — perhaps even to competing companies.  

But a recent paper co-authored by Rotman professor of strategic management Anita McGahan suggests that thinking may be completely wrong.

“We find that what happens instead is that these workers feel well treated and that they have a prolonged relationship with the company that gave them the training,” says McGahan. “The training actually increases their commitment to the work they’re doing with the employer.”

Still, as McGahan points out, it’s not a given that managers or contract workers will see these benefits ahead of time. But as she and her co-authors also show, training uptake can be improved if the training is promoted as a way to strengthen collaboration between the firm and the workers, rather than as a way to make workers or the company more money.  

“It turns out that people just care more about being valued as people,” says McGahan.

She and her co-authors came to these conclusions after taking a deep dive into the work arrangement between contract workers and the Brazilian branch of a multinational direct sales firm that the researchers call SalesNow (a pseudonym).

In their first study, the researchers wanted to see if offering contractors general skills training in both communication and tracking performance would increase their productivity and prolong their time at SalesNow. And indeed it did.  

On average, the trained workers increased their sales by 5.8 per cent per campaign and increased their own monetary gains by almost 30 per cent. They were also 9.3 percentage points, 10.9 percentage points, 4.1 percentage points and 1.3 percentage points more likely to remain with SalesNow after three, six, 12 and 18 sales campaigns, respectively.    

Given these gains, the researchers’ second study looked at how to increase training uptake by both managers and contractors at SalesNow. They hypothesized that managers would be more likely to endorse the training and that workers would be more likely to enroll in it if it was promoted as a way to strengthen the partnership between the firm and the worker. Again, the researchers were right.   

Managers were 13.5 percentage points more likely to support training when it was framed as strengthening partnerships with the company, rather than focusing on skill-building. Similarly, workers were approximately six percentage points more likely to start and complete the training when it emphasized partnership with the firm instead of boosting productivity

“This suggests that contract workers may really value having the opportunity to be invested in and that providing them with opportunities for growth doesn’t necessarily mean that they’ll market those skills on the open market as a first response,” McGahan says. “They may see training as a way that they can be even more attached to the employer.”

Firms that work with contractors should think deeply about these findings, she adds. 

“Say you’re a contract worker and I say to you we’re going to give you the choice of some training because we think you’re great at what you do and we want to deepen our relationship so that maybe you can contribute even more,” she says. “That’s just more satisfying than if we say this training is going to help you or the company make more money.”

Understanding this now is more important than ever, she adds. According to a recent report from Securian Canada, nearly one-quarter of Canadians — or about 7.3 million adults — are participating in temporary or freelance work ranging from photography and graphic design to online tutoring and food delivery.

The reasons for the rise of the gig economy are many, says McGahan, and include workers wanting more flexibility and needing to supplement their incomes, as well as employers wanting to lower their labour costs and needing more specialized skills.  

But whatever the reason, McGahan says that the bottom line for employers is that investing in skills training for contractors is worth it — just as it has been shown to be worth it for more permanent employees, she adds.

And really, she says, all of this gets at the heart of why people work in the first place.

“We focus quite a bit on the monetary and compensatory elements of work,” she says. “We focus somewhat on the social and community parts of work. But this is also adding on to that a personal development effect. And the idea is that people will really value that and think of themselves as treated well even by a contracting company if what they're getting is some sense that their personal development is valued.”

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