Boomerang independent contractors: an experimental study using a psychological contract approach

Abstract

The increasing prevalence of nontraditional work arrangements has led to new talent management challenges for organizations. Given independent contractors (ICs) have the potential to bring considerable value to an organization, it is in an organization’s best interest to establish a pool of loyal talent that is willing to return when needed (i.e. as boomerang ICs). Through the lens of the psychological contract, we examine factors that can contribute to retaining independent contractors. Using an international sample of ICs and an experimental research design, we demonstrate that ICs are less likely to return to an organization after a perceived psychological contract breach during a previous project for the same organization. This is especially true if they voluntarily work on a contract basis. Importantly, our results suggest that expectations of both a transactional and relational nature influence independent contractor loyalty to organizations. Our findings extend the limited research on talent management in nontraditional work arrangements, producing important theoretical and practical implications for the management of independent contractors within organizations.