Before delving into the value you can unlock by introducing Statement of Work (SoW) into your recruitment solutions portfolio, it is vital to understand why statement of work (sow) is essential for your hiring strategy.
In this article, we’ll look at creating a business case to onboard a suitable SoW solution.
To begin, let’s focus briefly on defining SoW and the role it plays within your organisation. The obvious question to start with is, “How much do you know about the use of SoW workers within your company?”
In many larger companies, the acquisition and management of SoW workers is often decentralised and controlled by the business units or the functional departments that utilise them. In fact, the use of SoW workers is a classic ploy used to hide external staff headcounts and avoid approval workflows or tenure policies. Often, business leaders that use SoW contractors don’t consider these as talent but rather an external service and, therefore, fail to consider the compliance aspects of this type of labour.
So if you feel that you lack visibility into SoW spend, you probably do. Fortunately, that’s good news in terms of building the business case for bringing SoW under proper spend control.
tackling unmanaged spend with SoW
Before you can make a concerted effort to create your business case, you need an idea of how much uncontrolled tail spend is incurred through the unmanaged use of SoW workers. This is rarely an easy task, because tail spend flies under the radar of procurement and is seldom properly documented, let alone identified by data that can easily be reported on or visualised.
Therefore, understanding the potential value of shifting SoW workers under the management of a recruitment partner will require a deep-dive exercise involving all hiring managers in your organisation. As an indication of where to look for value, it might be found in:
- eliminating over-the-top billing practices by suppliers
- reducing security threats caused by incomplete offboarding processes
- reducing risk of worker misclassification
- improving management of the overall talent pool
- reducing costs for administration and invoice processing
Once you have a picture of how, where and why SoW suppliers are being used in your organisation, you can begin to quantify the savings and improvement opportunities that will cement your business case for change. The first challenge is gaining support from business units in providing this initial visibility.
Address common misconceptions early
While the picture of SoW usage might seem elusive, you can gain the support of hiring managers with the right approach to discovery.
The key objective should be to satisfy managers regarding their concerns about onboarding external expertise. Common misconceptions include:
- Incumbent talent will be retained only until projects are completed. In many cases, talent onboarded for the initial project can later be used as a resource on future projects.
- Hiring managers’ business needs will no longer be served effectively. An experienced partner can provide both strategic and administrative services to ensure high user satisfaction.
- Managers will lose access to SoW talent in the future. An effective partner optimises the supply chain to retain valuable talent, providing hiring managers consistent access.
By removing these natural fears and clearly communicating the issues and details of what is at stake, you should have little problem getting hiring managers to provide the information you need.
In addition to gaining buy-in from line leaders, you will need to involve colleagues in HR, procurement category managers and perhaps a legal specialist to look at the potential worker classification issues and compliance exposure. You might also want to include a change manager at this early stage since an impact assessment will be worthwhile to underpin change management efforts as the project progresses.
Service procurement and full life cycle service procurement
At the very least, your recruitment partner should be prepared to assist in the discovery phase of your project, as well as to evaluate its own capacity, capability and technological ability to incorporate SoW into the management model. At the other end of the spectrum, if your provider offers full life cycle management, its representatives will be involved from the outset, from project scoping to cost evaluation and strategy development. More than anything else, your company’s success in starting the journey to total talent management will depend upon your provider’s ability to manage the complexities of SoW talent.
When it comes to management of SoW workers and suppliers, what does success look like? The answer will differ according to your company’s objectives.
There are many scenarios for success, including:
- total visibility of all contingent worker spend
- confidence that misclassification liabilities are at a minimum
- reduced supplier rates for highly skilled and specialised talent
- top talent acquired for every project
- improved buyer/supplier relationships
- elimination of single-source contracts
- access to a continuous pipeline of talent
- more projects completed on-time and on-budget
These are but a few examples of how you might identify a successful total talent management programme. None of them are very likely while your SoW workers are hidden from your sight. The best outcomes in talent management depend on visibility and well-managed, streamlined procurement processes.
Ready to start regaining control of unwanted expenditure?
Our expert team can work with to introduce a tailored SoW solution to your organisation, or aid you in transitioning across from an existing provider.
If you are interested in finding out more about the benefits of integrating an SoW or exploring how Randstad can help you with your talent management click below to request a call back: