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5 Common Contractor Management Challenges (And How to Overcome Them)

By Addison Moore
Published: May 3, 2023
Key Takeaways

An effective contractor management program will reduce costs, increase productivity, and improve safety on the worksite.

Caption: Workers on construction site Source: af istocker / iStock

Contractor management is a crucial aspect of any business with an external workforce.

Contractors fill skill gaps, provide specialized expertise, and augment the workforce for specific projects or tasks. However, managing those contractors introduces unique problems that require different solutions.

In this article, we'll discuss some of the key contractor management challenges you are likely to face when working with contractors, as well as the actionable strategies you can implement to overcome them.


Inefficient Onboarding

Good contractor management starts right at the beginning, with the onboarding process.

Inefficient onboarding can result in project delays, increased costs, and rush jobs. Contractors need to begin their work in a timely manner, which they can only do if they are onboarded as quickly and smoothly as possible.

As the hiring organization, you must also take steps to ensure you're hiring the right people for the job. This should be a fairly quick process, but it can be slowed down by a lack of documentation, unclear expectations, and outdated technology.

To avoid these delays, you will need a well-defined onboarding process that covers all the necessary steps, from verifying contractor qualifications to assigning tasks and setting up communication channels. An effective onboarding process should include all necessary documentation, such as contracts, training materials, and compliance requirements.

The right tech solution can also help streamline your onboarding process. Online portals, automated workflows through contractor management software, and other digital assets can reduce the manual workload, improve communication with contractors, and increase efficiency.

(Learn more about The 4 Stages of Contractor Management)

Poor Communication Channels

Clear communication is essential for the success and safety of your operation. Relying on inadequate communication channels can lead to misunderstandings, missed deadlines, and subpar performance. When working with contractors, communication problems can arise from a number of factors, including the learning curve for newly onboarded workers, a lack of management structure, and insufficient training prior to work commencing.

To overcome this, set up clear communication channels and protocols for all your contractors. This should include regular check-ins, project updates, and feedback sessions.

You also need to ensure there is a point person for on-site contractors, such as a site supervisor. That way, there is no confusion about who they can go to when they have questions and concerns.


Naturally, better communication technology can also be a significant improvement. Project management tools, video conferencing, and message platforms are great ways to streamline the flow of information across your workforce.

Lack of Visibility into Contractor Performance

Many organizations would be hard pressed to give you an accurate assessment of their contractors' performance. This can be due to inadequate tracking systems, spotty data collection, or inconsistent feedback. Likewise, many departments tasked with these assessments don't understand which key performance indicators that pertain to their contractors and how to best use these metrics. The resulting lack of visibility into contractor performance can result in lower productivity and unsafe work environments.

To keep a closer tab on contractor performance, establish job-specific performance requirements and regularly review and provide feedback to contractors. Provide workers with insight into how they can continue to improve and contribute to the overall level of productivity of the workforce. Ensure that your feedback system includes regular check-ins, progress reports, and post-project reviews.

(Find out How to Properly Measure Contractor Engagement)


Meeting compliance requirements is a collective effort that acts as both a legal and moral responsibility. Failure to comply with legal and regulatory requirements can result in significant financial and reputational damage, not to mention potential physical harm to the people in your workplace.

Compliance issues can arise from outdated policies, a lack of training, and ineffective recordkeeping. As such, it is imperative that you establish clear compliance policies and procedures that are in line with standards set out by OSHA and other regulatory agencies. Be sure to also maintain accurate records of contractor activity and regularly audit their compliance practices to find gaps in their strategy.

Lack of Engagement and Retention

While contractors provide valuable expertise and support for your business, the fact that they leave once the project is complete represents a loss of knowledge and skill from your workforce. Contractors can also leave due to a lack of engagement, poor treatment, unsafe work environments, or low compensation.

To ensure maximum retention rates, focus on engaging your contractors in valuable work that puts their skills to use in a productive environment. Implement measures to safeguard their mental and physical wellbeing, such as competitive compensation packages, opportunities for professional development, and a positive company culture that values and recognizes the contributions of contractors.


Working with contractors introduces risks and challenges that must be addressed with an effective contractor management program. A well-rounded program can not only improve your relationship with contractors but also increase productivity, ensure safer practices, and create a positive impact on your business performance.


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