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Hiring Managers are turning to Statement-of-Work contracts to maximize their job outcomes. Why? And what are the implications of adopting them in your talent strategy?<\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.8.1″ _module_preset=”default”][et_pb_column type=”4_4″ _builder_version=”4.8.1″ _module_preset=”default”][et_pb_text _builder_version=”4.8.1″ _module_preset=”default”]
A Statement-of-Work (SoW) is a form of contract between a company and a staffing provider or individual that agrees to pay the contracted party for their efforts based on the achievement of pre-determined project outcomes. Typically, these outcomes are formed around project way-points (sometimes called \u2018Milestones\u2019). An effective SoW will define the specific services the contractor is expected to deliver, including work details, costs, timelines, terms and expected outcomes.<\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”3_5,2_5″ _builder_version=”4.8.1″ _module_preset=”default”][et_pb_column type=”3_5″ _builder_version=”4.8.1″ _module_preset=”default”][et_pb_image src=”https:\/\/ustechsolutions.com\/wp-content\/uploads\/2021\/02\/AdobeStock_304017811.jpg” title_text=”AdobeStock_304017811″ _builder_version=”4.8.1″ _module_preset=”default”][\/et_pb_image][\/et_pb_column][et_pb_column type=”2_5″ _builder_version=”4.8.1″ _module_preset=”default”][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.8.1″ _module_preset=”default”][et_pb_column type=”4_4″ _builder_version=”4.8.1″ _module_preset=”default”][et_pb_text _builder_version=”4.8.1″ _module_preset=”default”]
Use of contingent workers and \u2018the gig economy\u2019 means that firms can get their work done faster, with no employment risks. SoW turns requirements for contingent workers into \u2018jobs to be done\u2019 that can be contracted out by purchasing departments. These contracts then, are popular today because they allow hirers of indirect workforce resources to pay on results, rather than hours worked. Departmental managers, with work to be performed, can hire specific skills for each project or activity stream they need to complete.<\/p>[\/et_pb_text][et_pb_text _builder_version=”4.8.1″ _module_preset=”default” custom_margin=”||10px|||” custom_padding=”|41px||41px||”]
According to Staffing Industry Analysts<\/span><\/a>, over 50% of organizations in the US have already adopted SoW in their Contingent Workforce programs, and those that aren\u2019t already doing it are likely to do so in the next 2-years. The widespread adoption of SoW contracts in the US illustrated by the figures above, remains untypical across the rest of the world. Most other countries show SoW contract adoption in less than 10% of organizations. This suggests that one of the main reasons why SoW is favoured in the US comes down to the higher level of co-employment risk; meaning that employers adopt SoW contracts to avoid falling foul of employment law more than for the benefits it brings to get work done.<\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.8.1″ _module_preset=”default”][et_pb_column type=”4_4″ _builder_version=”4.8.1″ _module_preset=”default”][et_pb_text _builder_version=”4.8.1″ _module_preset=”default”] SoW contracts are growing in popularity. Partly, the noticeable increase in SoW usage is spurred on by the desire of firms to tap into the contingent workforce. Use of contingent workers in the US continues to grow, and already represents over 35% of most large enterprise workforces. In the UK, analysts including Accenture<\/span><\/a> and Deloitte<\/span><\/a> predict that the contracting and freelancing market will grow to represent 30% of the workforce in the next few years. By focusing on project outcomes, not hours worked, organizations can to sugar-cube their resourcing needs and source best-fit, value-for-money solutions from a large addressable market of talent.<\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.8.1″ _module_preset=”default” custom_padding=”||5px|||”][et_pb_column type=”4_4″ _builder_version=”4.8.1″ _module_preset=”default”][et_pb_text _builder_version=”4.8.1″ _module_preset=”default”] Key attributes of a Statement of Work include:<\/p>[\/et_pb_text][et_pb_text _builder_version=”4.8.1″ _module_preset=”default”] SoW contracts are an effect hiring option for companies that have a long list of work to be done that are struggling to source the talent they need, but there are some \u2018must-do-well\u2019 aspects that companies considering SoW contracts need to get right.<\/p>[\/et_pb_text][et_pb_text _builder_version=”4.8.1″ _module_preset=”default” custom_margin=”||2px|||”] When SoW contracts are poorly formed, they can lack the level of detail needed to protect both parties from mis-understandings and contract risks. That\u2019s why we recommend organisations that have never used SOW contracts to source good impartial advice on how to design their scheme.<\/p>[\/et_pb_text][et_pb_text _builder_version=”4.8.1″ _module_preset=”default” custom_margin=”||0px|||”] It\u2019s vital that the SoW contract is clear what constitutes the completion of a way-point because any lack of clarity can result in upset should the contractor not be paid. It\u2019s not common but occasionally disputes flair up when parties disagree on the quality of work produced. Being clear on what constitutes completion can help to avoid this.<\/p>[\/et_pb_text][et_pb_text _builder_version=”4.8.1″ _module_preset=”default” hover_enabled=”0″ custom_margin=”||-6px|||” custom_padding=”||7px|||” sticky_enabled=”0″] It\u2019s no good thinking that the hourly rate you pay for a contractor will be anything similar to the hourly rate of a full-time employee. Contractors face a significant amount of downtime between jobs and they have to cover their \u2018cost-of-sale.\u2019 They may even have to cover their own expenses if these are not reimbursed. Bear in mind also that contractors are commonly more skilled and therefore expect to be paid for their knowledge and delivery capability. Fail to pay a reasonable market rate for your work and you\u2019ll find your SoW ambitions will soon go away.<\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]\n\n","protected":false},"excerpt":{"rendered":" 4-minute readHiring Managers are turning to Statement-of-Work contracts to maximize their job outcomes. Why? And what are the implications of adopting them in your talent strategy?Statement-of-Work contracts place a focus on work outcomes, not hours workedA Statement-of-Work (SoW) is a form of contract between a company and a staffing provider or individual that agrees to pay the contracted party for their efforts based on the achievement of pre-determined project outcomes. Typically, these outcomes are formed around project way-points (sometimes called \u2018Milestones\u2019). An effective SoW will define the specific services the contractor is expected to deliver, including work details, costs, timelines, terms and expected outcomes.SoW BenefitsUse of contingent workers and \u2018the gig economy\u2019 means that firms can get their work done faster, with no employment risks. SoW turns requirements for contingent workers into \u2018jobs to be done\u2019 that can be contracted out by purchasing departments. These contracts then, are popular today because they allow hirers of indirect workforce resources to pay on results, rather than hours worked. Departmental managers, with work to be performed, can hire specific skills for each project or activity stream they need to complete.According to Staffing Industry Analysts, over 50% of organizations in the US have already […]<\/p>\n","protected":false},"author":10,"featured_media":8139,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[68],"tags":[],"class_list":["post-8138","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-total-talent"],"yoast_head":"\nUs of SoW contracts is booming
Features
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When it doesn\u2019t work
Representing an exhaustive description of the requirement in your contract
Being clear on way-point outcome measures
Paying a reasonable price for work done