Statement of Work: More problem than solution?
For a while now, engaging contingent workers via a Statement of Work (SOW) has been touted as the answer, but is it the right answer?
Workplace trends are tied to business confidence and economic conditions and the SOW has been offered up as a way for employers to ride the waves of change and ensure headcount flexibility.
In this blog, I will take a hard look at the SOW starting with an examination of what this contract is really all about… What is in the fine print that employers often miss – or the true biggie – what should be included?
In my next blog I will outline typical problems with the SOW and explore an alternative to reduce your contingent labour costs, so stay tuned if you want to reduce your contingent labour costs.
So, let’s take a closer look at the SOW
- Be clear on whether you are contracting an outcome or simply resources on a rate card;
- Ensure that the SOW ties into your master agreement and doesn’t absolve your supplier of any of their responsibilities – responsibilities that someone in your organisation worked hard to ensure they committed to;
- The level of experience and type of resource provided by your service provider – i.e. permanent staff member, bench contractor or on hired agency contractor.
How to ensure a more effective ROI
- Include specific deliverables and timelines for each key role engaged as part of the SOW;
- Outline how these deliverables and timelines tie back to the master agreement;
- Spell out expectations for each person brought in under a SOW to achieve a specific level of quality for the work undertaken. Lines of accountability and cost penalties for failing to meet those expectations should also be detailed in the SOW.
I’m sure you’d agree that if SOW resources are being engaged via a traditional consulting firm, that firm should be responsible for their quality of service and outcomes.
Yet in many instances, this isn’t the case. A SOW commits a firm to supply certain individuals at a daily rate, yet some suppliers also use it to absolve themselves of nearly all risk related to those individuals’ outcomes.
That shouldn’t be good enough.
Images: Shutterstock
This article is sponsored by Hays.
Join Shane at the Contingent Workforce Conference in Sydney on 27 & 28 September 2016 as we workshop how Talent & Procurement Leaders can prepare for the ‘The Rise of the Gig Workforce’. See the full agenda and register here.
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