Treating Employees Like Contractors Is On the Rise—and Will Likely Backfire

If you spell out all their duties and restrictions, workers aren’t likely to go above and beyond

The growing use of contracts with employees may lead to diminished loyalty and effort.Illustration: Kiersten Essenpreis

Over the past couple of years, there has been a lot of discussion about the future of work—whether people will continue to work remotely, the trend toward quiet quitting and the rise of the gig economy. But all this fascination has ignored a big and important change already well under way in the U.S. labor force: the widespread use of legal contracts to manage employees.

Companies’ embrace of things such as noncompete and arbitration agreements, as well as policies that spell out exactly what employee behaviors are desired and will be rewarded, can make it easier to manage people. But it also has a pernicious impact on organizations in the long run, because when companies start treating their employees like contractors, those employees are likely to start behaving like contractors.

Continue reading your article with
a WSJ membership

View Membership Options

Already a member? Sign In

Next in Journal Reports: Leadership

Journal Reports: Leadership
Companies Look for Ways to Bring New Directors Up to Speed Quickly
By Emily Glazer
November 7, 2022 at 4:00 PM ET

Boards are tapping more rookie directors, at the same time board responsibilities have increased. A new level of onboarding is the answer.

More Journal Reports: Leadership Articles

Sponsored Offers
  • The Motley Fool:
    New members save 55% on Stock Advisor
  • Wayfair:
    Wayfair promo code for Black Friday: 25% off $150
  • American Eagle Outfitters:
    Get 15% off AE promo code with text alerts
  • Postmates:
    Save $5 on first 5 orders using Postmates promo code - $25 savings
  • DoorDash:
    25% off all orders over $15 with DoorDash coupon code
  • Instacart:
    Instacart promo code: $20 off sitewide