Module 4: Managing Employees and
Contractors

How to hire specialist contractors and subcontractors
The benefits and potential problems of working with contractors
The key parts of a contract for services agreement, including important legal clauses
Recruiting and working with employees, including their statutory entitlements
Summary/What you will learn:
How to hire specialist contractors and subcontractors
The benefits and potential problems of working with contractors
The key parts of a contract for services agreement, including important legal clauses
Recruiting and working with employees, including their statutory entitlements
Working with temporary workers and zero hours contracts
Managing day to day problems in the workplace

4.1 Different types of worker

A Facilities Manager will work with many different individuals
during the course of their career and it is important to be able to recognise some of the
key differences in the varying types of employment or service contracts, to ensure
compliance from a legal and due diligence perspective.
For example
You are likely to work with employed individuals - either as colleagues in other departments working
for the same business as you, or you could even be a line manager to some and therefore, have
additional responsibilities towards them. In addition to those on permanent employment contracts,
you may also need to utilise the support of temporary staff, either directly or indirectly.
Of course, another key group that you will work with are the specialist contractors that you will hire
to carry out specific tasks or projects on your behalf and it is helpful to understand the nature of
these contracts and relationships, in order to get the best from them.

4.2 Working with contractors and sub-contractors

As your role as Facilities Manager involves the identification of problems and
issues in the physical working environment and the co-ordination of solutions.
There will be a number of instances in which you will need to work with contractors and
below are some examples:
The building's heating system fails and you have to call a heating engineer.
There is a problem with the water supply and you need the services of a plumber.
The lift stops working and you require an electrical engineer.
Contractors are not directly employed by your business. Instead, they are either employed by a third
party company which carries out work for your organisation, usually under a contract for services.
Alternatively, they may be self-employed.
A sub-contractor is somebody who works directly for a contractor, to complete a specific piece of
work on their behalf. It is important to remember that the contractor, not the organisation, retains
responsibility for the work of the subcontractor.
You may find that the contractors that you work with also use the services of sub-contractors, in
order to fulfil their role with you effectively.
Here are some of the pros and cons of working with contractors and subcontractors:-
Advantages of using contractors and subcontractors
Flexibility is one of the main advantages of working with contractors. You need only hire them
for either a one-off or recurring piece of work, when the need arises for their particular
skillset. This often means a cost saving, as although hourly rates will inevitably be higher, you
are only paying for the work that you need, rather than a set annual salary, plus employee
benefits such as holidays or sick pay. Another key difference is that you will not be obliged to
pay tax or employer's National Insurance Contributions on behalf of the contractor, as it is
their own responsibility to do so.
Contractors are generally specialists in their particular trade and have experience in one
specific area for different types of client. This could result in them having a higher standard of
workmanship and knowledge, which your business can benefit from.
Disadvantages of using contractors and subcontractors
If the hourly rate of the contractor is significantly higher than that of an equivalent employed
individual, depending on how much you use their services, it could actually cost you more. A
cost/benefit analysis is a useful way of working out the best way to work with
employees/contractors.
You may find that you have less control over the quality of work and attitude, etc of
subcontractors, as they are not working directly for you - although you should bear in mind
that your contractor has a responsibility to you, as the client, to ensure that the subcontractor
is suitable for the job in hand.
Trust is a key part of the relationship between you and the contractor and you will want to
develop good and enduring working relationships with contractors that you can rely on and
trust.

4.3 Sourcing and working with contractors

Below are some considerations regarding how to find contractors
and how to set up and manage your working relationship with them.
Sourcing contractors
A common way to find contractors is via word of mouth referrals or recommendations from your
colleagues in the facilities field. You may even have direct experience of working with particular
tradespeople in previous roles and wish to continue the relationship that you have built with them.
Alternatively, you may choose to work with a larger services company which offers a number of
different professionals and services under one umbrella. You may benefit from the established
reputation and quality standards that come along with this type of business, although it may cost
more and you may be tied into an ongoing contract for services with them.
Pre-work and background checks
You will probably wish to conduct checks on the contractor, to ensure that they possess the required
skills and qualifications to perform the role that you are hiring them for. You should check their
qualifications and membership with the appropriate trade and professional bodies.
It can also be a useful exercise to ask for references from previous clients of the contractor, so that
you can find out more about their reliability, standard of work, attitude to work, etc.
Written agreements
A contract for services is the written agreement between yourself and the contractor and its aim is
to outline the roles and responsibilities of each party and also offer sufficient protection for both, for
the duration of the piece of work.
Generally, a contract for services comprises of the following parts:-
Firstly, a general overview of the work in hand and subsequently, a more detailed description
of the specifics of the tasks to be carried out by the contractor. Specifically, it should include
both quantitative and qualitative measurable milestones and deliverables that should be
completed during the work.
Division of work and responsibilities. For example, you may require the contractor to provide
their own materials, but you will provide the equipment. The detail of this section will usually
vary from contract to contract, depending on the scope of the work.
A fee schedule, listing the fees that will be paid to the contractor and when - for example, will
it all be paid upon completion of the work or will an advance be offered.
There are a number of legal clauses such as intellectual property, confidentiality clauses, etc, which
we will cover in more detail below.
Contract for services - legal and contractual clauses
Make note of these useful clauses, which are included in most contracts. You can find sample
template clauses and agreements on the internet or if your company is larger, you may have an HR
or legal team who will draft them for you.
Employer's liability insurance - if your contractor employs anybody, this is a compulsory policy
in case of any injury sustained by an employee during the course of their work.
Intellectual property clauses - these clauses prohibit individuals from copying or stealing any
of the specific parts of your business, such as its brands, designs, etc.
Confidentiality clauses - these clauses aim to protect the inevitable flow of confidential
information between the employer and contractor, by prohibiting the sharing of such
information outside of the scope of the work.
Public liability insurance - although not mandatory, you may ask that your contractor takes
this policy out to provide cover in the case of damage or injury to third parties on the premises
during the course of the contractor's work.

4.4 Service companies

Service companies are third party organisations that offer support
or management to companies for facilities related repair or maintenance services, either
on an ad-hoc or ongoing basis.
Many of the bigger companies offer a wealth of services, from electrical installations and IT support
to pest control and business contingency planning. If you are a Facilities Manager in an
organisation, an alternative to working with a number of different independent contractors is to
create a partnership agreement with a service company to look after all of your specialist needs.
Generally, this will involve signing a contract for services, with set fees and service level agreements
(SLAs) that the company will be obliged to keep to when you use them. Often, there is an annual or
monthly retainer fee for the service, as well as a charge for each callout that you require.
Service companies can be a reliable way of providing specialist support to your business,
particularly if you are working to a set budget and are looking for consistency of support, without
needing to deal with multiple contractors simultaneously. The downside can be that there is a lack of
continuity, as you are not guaranteed the same workers every time. You should also consider the
cost and potential inflexibility of being tied into an ongoing contract, without knowing what your
future requirements for work will be.
Fact
There are 1.4 million contractors/freelancers in the UK
Source: Study by the Professional Contractors Group using date from the Labour Force Survey and
BERR - 2014.

4.5 Working with directly employed individuals

As well as working with contractors, Facilities Managers also must work with
individuals employed by their organisation, probably in a variety of different
departments and roles.
It is also likely that you will be a line manager to other, more junior individuals in the facilities team.
Therefore, this section aims to give you an overview of some of the considerations around managing
and leading your own team.
You may employ individuals on either a permanent and ongoing contract or on a fixed term or
temporary basis. Each individual should have a written contract of employment, which details the
terms and conditions that apply to both the employer and the employee, such as salary, benefits,
work expectations, etc.
Most types of business utilise the services of employees as their core workers, as well as making use
of other employment types.
Having permanent employees on the books means that you can count on a constant and reliable
source of work from them and potentially a greater amount of knowledge and engagement with the
business and its goals. Of course, one of the main downsides of employing workers from a cost
perspective is that they are a fixed cost and must be paid all year round, even during quieter periods
of work.
Contracts of employment
Employees should be given a legal contract of employment within a maximum of two months of their
start date with the business.
The contract should cover the following points, as a minimum:-
Start date of employment.
Place of work, job title and description of duties. In addition to the contract, you may wish to
issue a separate job description as an appendix, detailing further information about the tasks
and activities involved in the role.
Hours of work - this is usually the minimum weekly hours that the employee will work, before
any overtime is taken into account.
Salary - this is generally the gross annual salary, prior to any deductions such as tax or
National Insurance.
Annual leave - there is a statutory minimum level of annual leave that an employer must
provide to an employee, although some employers choose to enhance this.
Notice period - this is how much time both the employer and employee must give the other, if
they want to terminate the contract.
Activity 1
Estimated time: 10 minutes
Imagine that you are the Facilities Manager for a small shopping centre on the outskirts of a town.
You have been given a budget to recruit two additional people to support you in the facilities team.
Brainstorm the main advantages and disadvantages of choosing the following types of worker and
justify your reasoning:-
Permanent employed individuals
Individuals on zero hours contracts
Individuals on temporary work contracts
Employees' statutory entitlements
When managing a team of people, you should make yourself aware of some of the areas of
employment that are covered by law and we have summarised some of the most common aspects
below.
Please note that this is not an exhaustive list of all of the entitlements that exist and the rules and
regulations surrounding them are subject to continuous review and change by the government. In
order to ensure that you are meeting your obligations towards your staff around these matters,
please seek specialist HR advice, where appropriate.
Annual leave entitlement - All employees are entitled to a certain amount of annual leave away
from work per year, regardless of their length of service. This entitlement should be pro-rated
for part time staff. Non-permanent employees, such as temporary or agency workers, are also
entitled to annual leave, but you are able to pay them out for this in lieu of them taking the
time off.
Statutory Sick Pay (abbreviated to SSP) - This is what an employer must pay an employee if
they are too ill to attend work. There are certain criteria that must be met in order to trigger
SSP, such as a certain amount of service, earnings over a set period, etc.
Statutory Maternity Pay, Statutory Adoption Pay and Statutory Paternity Pay (abbreviated to
SMP, SAP and SPP) - Irrespective of their length of service, all employees are entitled to a set
period of statutory leave if they or their partner are having or adopting a child. Whether or
not, or how much, you pay them during this leave depends on their length of service and how
much they earn.
Pensions automatic enrolment - Depending on the size of the business, an employer must
provide a basic contributory pension scheme to employees and auto-enrol them into the
scheme to make their own contributions alongside the company's.
Working Time Directive or Regulations (abbreviated to WTD) - These European regulations
detail the upper limits in the amount of time that an employee should be asked to work,
including the total number of hours per week and how many break periods and rest periods
should be provided. Workers can choose to opt out and some particular roles are exempt from
the regulations altogether.

4.6 Agency workers, temporary workers and zero hours
contract

There are other ways of working with individuals, instead of
employing them on permanent contracts.
Let's take a look at some ways of utilising the skills and services of individuals, but on a more
flexible basis.
Employment agencies can provide you with staff on a temporary basis, to meet peaks in demand or
workload in your department, or to cover annual leave or sickness absence. In this scenario, the
individual is employed directly by the agency and you have a contract for services with said agency
to provide you with staff at a certain rate and of a certain quality.
Recent legislation, namely The Agency Worker Regulations, provides added protection to temporary
workers who spend longer periods of time working for one employer.
For example
After a 12 week qualifying period, an employer must provide the same key working conditions and
benefits to any agency workers as they do their permanent staff, such as pay, annual leave, breaks,
etc.
A zero hours contract is a different type of contractual arrangement between an employer and a
worker. In this case, the agreement states that there is no obligation on the part of the employer to
offer a minimum number of working hours, nor is there any obligation on the part of the worker to
accept any working hours that are offered to them.
Zero hours contracts have received some bad press of late and have been associated with poor
working conditions and a lack of fair treatment and job security, but it is possible to use them
responsibility and for the benefit of both the business and the worker themselves.
Here are some tips on how to use zero hours contracts in the most responsible and
effective way:-
Note that the definition of an individual on a zero hours contract is not that of an employee,
but that of a worker. They are not entitled to all of the benefits that you may offer your
employees, but they do retain some of the same rights, for example the right to be paid the
minimum wage, receive pay in lieu of annual leave and the right to a safe working
environment.
Consider the hourly pay rates for your zero hours contracts carefully. It is common to offer
enhanced rates of pay for individuals on zero hours contracts, to compensate for the fact that
the regularity of their work is less predictable, or even because of a particular skill that they
possess. However, they should receive at least as much pay as an employed individual doing
the same job.

4.7 Managing day to day problems in the workplace

Managing a team can be tough - in fact, good leadership is a skill in
itself and a practice that needs experience, expertise and an ongoing honing of skills.
You may need to be prepared to put some work into becoming a good and effective manager, as it
requires a different skill set to your role as a Facilities Manager.
Here are some common issues that you may need to tackle in your role as a line manager:-
Performance issues
If you have a team member who is not performing to the required standard, you will generally pick
this up from a mixture of your own observations, feedback from others, poor performance against
targets or KPIs, or even in the employee's annual appraisal.
Although this can be a difficult topic to broach with an individual, the key thing to remember is that
the earlier that you discuss the problem, ideally in an informal manner to begin with, the more likely
it is to end in successful resolution.
First of all, listen to the individual's point of view, as there may be valid reasons for their dip in
performance which you aren't aware of. Setting the team member some stretching but realistic
targets for improvement can help them to get back on track and will also require you to regularly
discuss and monitor their performance against them. If no improvement is reached, you may need to
consider taking action with your organisation's formal performance management process.
Communication problems
Communication is one of the most vital elements of an effective team, but it is not always easy to
achieve it. Many things can lead to poor communication, such as a team who are new to working
together, lack of effective leadership, poor listening skills, or a failure to understand the job role
and/or priorities of others.
From a manager's perspective, communication problems can be tricky to fix. One of the most
important things is to foster a culture of open communication across your team or workplace, with
regular meetings or opportunities for individuals to ask questions or put their view across. If morale
in the team is poor, you could consider ways to allow the team to get to know each other better, both
professionally and personally. Consider your own leadership style in the mix too - do you have a true
“open door” policy where staff can approach you about any concern, problem, or opportunity, or
could you inadvertently be creating a culture of poor communication?
Activity 2
Estimated time: 10 minutes
You are heading up a project to move your office premises and are working with different
departments to co-ordinate the move effectively. A disagreement has broken out between the IT and
HR Managers about the best way to transfer employees' confidential data during the move.
Re-visit the principles for effectively resolving a dispute in this module and brainstorm how you
would aim to deal with this conflict and what skills you would use.

4.8 How to resolve disagreements and conflict in your team

Facilities Managers often have an influential role to play in the
resolution of problems and conflicts between people.
Firstly, they are often a crucial point of contact for individuals involved in a specific project or piece
of work that pulls different departments together and this difference of role or priorities can
sometimes lead to misunderstandings and disagreements. You may therefore find yourself having to
mediate between two or more other parties, in order to help to resolve a particular issue. This is also
true of your role as a line manager.
Below are some thoughts on how to effectively deal with disputes in the workplace:-
The action that must be taken before you can even attempt any solution is to properly
understand all of the facts relating to the dispute. As part of this, you will probably need to
speak to all parties separately, speak to other witnesses or individuals in the organisation and
review any relevant documentation, etc - in short, whatever research you need to undertake to
fully understand the background and circumstances.
Next, it is important to find out and effectively manage the different parties' expectations. This
is crucial, for without knowing what is driving individuals or what their expected or desired
outcome is, you will not be able to resolve the matter in the best way. Remember that the key
to most resolution is compromise.
Try to involve all parties in the process of resolution, keeping the lines of communication open
and allowing individuals to input constructively. You may need to make some ground rules to
ensure that everyone is working in the most effective way possible, such as asking that
discussions are calm and positive, without a focus on blame or what has happened in the past.
This leads us on to ensuring that there is a real and genuine focus on resolution and how to
move forward. This is crucial to achieving a sustainable resolution that everyone is satisfied
with.
Assignment
managing Employees and Contractors
Time: 30+ minutes
Hopefully, you took in as much of the information in this module as possible. To find out how well
you have done, complete the following worksheet.
Download the worksheet below and complete.
Download Worksheet (PDF)
Module Summary
In this module, you have learned all about the different types of individual that you will be working
with or managing in your role as a Facilities Manager. To begin with, we defined the difference
between contractors and subcontractors and discussed the key advantages and also the risks of
working with these groups. As part of this, we covered contracts for services, the written agreement
that exists between a contract and a client and some of the important clauses that should be
included in them, such as confidentiality and intellectual property rights.
We also discussed an alternative to working with individual, self-employed contractors and enlisting
the services of a service company with an ongoing agreement for work. Next, we moved on to
working with employed individuals, including the key parts of a contract of employment and some of
the legal and statutory entitlements that you are obliged to provide your employees with.
We also covered the use of peripheral workers, such as temporary workers and zero hours contracts
and when both types of contracts could be useful. Finally, we took a look at your role as a line
manager to the facilities team and some common issues that you may have to tackle in this role,
such as communication issues or performance problems. We also gave you some tips on how to
effectively manage and resolve disputes in the workplace.