The contingent workforce is booming. Both companies and workers are turning to flexible working to achieve increased business agility and more control over how and when they work. However, traditional contingent hiring practices are riddled with frustrations that hinder both companies and workers.
Companies struggle with sourcing talent, managing projects, and tracking progress, often leading to missed deadlines and budget overruns. Workers, on the other hand, face unclear expectations and anxieties around successful completion.
The good news is that there’s a solution. Next-Generation Statement of Work (SOW)
contracting bridges the gap between companies and contingent workers by establishing clear expectations from the very beginning. The SOW serves as a roadmap, detailing project goals, deliverables, timelines, and payment terms. By implementing SOW contracting with modern tools, companies can streamline their contingent workforce management processes and ensure everyone involved is on the same page.
Contingent hiring has been challenging
The frustrations of traditional contingent hiring extend far beyond mere inconvenience. Ambiguous project scopes and unclear expectations create a ripple effect of negativity that impacts both companies and workers.
For companies, the lack of clearly defined project goals from the outset often leads to increased administrative burden. Hiring managers spend excessive time clarifying requirements and managing communications via email with contingent workers throughout the project. This inefficiency can snowball into missed deadlines as project scope creep becomes a frequent occurrence. Without a clear understanding of deliverables, companies risk accepting incomplete work or facing unexpected revisions, ultimately leading to budget overruns.
A McKinsey report found that “Poor project definition and unclear objectives are among the top reasons why projects fail, contributing to a 29% chance of exceeding budget and timelines.”
Contingent hiring has been challenging
Workers, on the other hand, experience a significant degree of frustration when project expectations are unclear. They may spend valuable time clarifying requirements with different stakeholders, leading to delays and hindering their productivity. The uncertainty associated with loosely defined projects can also lead to wasted effort, as workers may unknowingly complete tasks outside the original scope. Perhaps the most significant impact is on worker morale. Anxiety around successful completion and payment becomes a constant concern when project goals and success criteria are ambiguous. This lack of clarity can lead to a sense of disengagement and ultimately hinder the quality of work delivered.
A quick explainer on what SOW is and how it works
At its core, SOW defines the project’s scope of work. This includes a detailed breakdown of the deliverables – the specific tasks or outputs expected from the contingent worker. SOW also establishes clear timelines, ensuring everyone involved is on the same page regarding deadlines and project milestones as well as clearly outlining the payment terms, specifying how and when the contingent worker will be compensated for their work. This eliminates ambiguity and uncertainty around payment, boosting worker confidence and morale.
How SOW helps companies
For companies, SOWs bring several significant advantages. Firstly, they reduce administrative burden. By clearly defining project expectations upfront, companies eliminate the need for constant clarification and communication throughout the contingent worker journey. This frees up valuable time and resources for hiring managers and allows them to focus on core business activities.
Secondly, SOWs promote improved project clarity and communication. With everyone aligned on project goals and deliverables, communication becomes more streamlined. Companies can track progress more effectively and ensure that projects stay on track and within budget.
Finally, SOWs facilitate streamlined workflows and budget control. By clearly defining project scope and timelines, companies can create more accurate project budgets and avoid costly surprises down the line.
Everest Group research suggests that organizations can achieve a 10-20% reduction in administrative costs associated with contingent workforce management through SOW processes.
How SOW helps workers
The advantages for contingent workers are equally compelling.
SOWs provide workers with a clear understanding of project expectations and success criteria. They know exactly what is expected of them, how their work will be measured, and what constitutes a successful project completion. This clarity eliminates anxiety and empowers workers to deliver high-quality results with confidence.
Furthermore, SOWs ensure that workers are paid on time and according to the agreed-upon terms. The clear definition of payment terms within the SOW fosters trust and creates a more positive work experience.
Overall, SOW contracting fosters a collaborative environment where both companies and workers can thrive. By establishing clear expectations from the outset, SOWs pave the way for successful project completion, improved morale, and a more productive contingent work ecosystem.
Embracing technology is key
Technology is evolving and it is now easier than ever to automate the processes in the contractor job journey. By embracing SOW contracting, companies can leverage technology to transform the contingent worker experience.
At USTECH DIGITAL, we understand the transformative power of SOW contracting in the contingent work landscape. We go beyond simply advocating for SOWs; we offer a comprehensive suite of solutions designed to streamline SOW management and empower both companies and workers. And, unlike traditional SOW platforms that draft largely static contracts that are then essentially forgotten, our SOW solutions create a living, constantly adapting Statement of Work that frames the project scope and reality, and that focuses on the entire lifecycle of the SOW journey from the initial crafting of text to the final project conclusion and payments to suppliers.
We support contingent workers throughout their careers, rather than as a one-off. This means that instead of workers seeing one role as a single job and suffering the often tedious process of reapplying for new roles, they can build strong relationships with organizations. This helps give the worker job certainty and reduce the time taken to find new roles as well as giving the organization access to a pool of workers that are already familiar with their organization.
Modern SOW tooling brings a few major advances in the use of SOW contracting that make it more reliable and cost-effective than any other project delivery approach. It:
1. Presents contractual terms using Proactive Law that makes it easier for stakeholders to understand and appreciate their obligations upfront.
2. Is easily updated, re-distributed and authorized to avoid project documentation getting out of step with the real-world project activities, resourcing challenges, and level of progress made. Unfortunately, many manually produced SOW contracts are only accurate at the outset of a contract because they are difficult to maintain, inevitably leading to discrepancies, loss of goodwill and billing reconciliation challenges.
3. Equips every stakeholder with actionable insights and interpretive predictive analytics to ‘gift’ them the ability to act while they still can—to improve results and achieve outcomes.
4. Coordinates the distribution of communications through a single platform to prevent messages from being missed or lost in transit (which so often happens with email).
5. Provides a single version of the truth that all stakeholders can sign up to and agree with. Platforms need to bring consistency in knowledge sharing.
6. Presents an irrefutable log with the ability to evidence the breadcrumbs of decisions made, change requests accepted, terms adapted, etc.
7. Employs AI to compose fit-for-purpose contract terms and the wording of project articles, etc. to accelerate publishing and save time while improving the quality of clauses and terms.
8. Simplifies billing and invoice reconciliation by offering a simplified ‘SOW to Check’ workflow.
9. Is cloud-based, so that data is securely held, and the platform can be easily supported, scaled and updates painlessly made by the provider.
10. Integrates with incumbent HR and project systems to prevent the unwitting creation of copy/paste, swivel chair and data crunching tasks.
Final Thoughts
A skilled and flexible contingent workforce is invaluable. However, traditional contingent hiring practices often fall short, leading to frustration and inefficiency for both companies and workers. SOW is the solution. By establishing clear expectations upfront, SOWs pave the way for successful project completion, improved project clarity, streamlined workflows, and a more positive contingent work experience for everyone.
Are you ready to embrace the power of SOW contracting? USTECH DIGITAL is here to guide you on the journey. Our innovative SOW services and comprehensive contingent workforce management solutions empower companies and workers to thrive. Contact us today and discover how USTECH DIGITAL can help you unlock the full potential of your contingent workforce.