In the most recent SIA survey of contingent workforce managers, 59% said they already have statement-of-work consultants incorporated into their CW program, while 37% will likely seriously explore the idea within two years. And if those firms with two-year plans follow through, SOW is on track to reach the higher penetration rate of VMS and exceed those of other commonplace strategies such as domestic outsourcing and offshoring.
What are the reasons behind this push? CW programs considering incorporating SOW often see it initially as way to save a lot of money — and while that can be the case, it can offer much more. For many programs, statement-of-work management presents a next challenge as well as a next step toward a long-term objective of total talent management.
We take a look at some organizational drivers pushing for incorporating SOW into existing programs.
Talent. Today’s talent is already working at organizations in many different ways — including on a SOW-basis — and when that talent engagement proves successful, firms may seek to keep the worker on as a full-time employee or engage with them in another way. Especially given the current talent and skills shortage challenges, building a repeatable process that is centralized as far as governance on SOW spend is beneficial.
Control and visibility. Full visibility into SOW spend and engagement improves the overall quality of these engagements and enhances the experience of those in the organization who engage SOW services. A program can more easily shift from measuring costs to measuring value. In addition, contingent workforce program could align the SOW rate cards in specific categories to control costs and deliver savings.
Efficiencies and compliance. One system of record for the creation, collaboration and approval for SOW engagements drives compliance by ensuring proper worker classification and policy enforcement, such as onboarding and offboarding procedures.
“There’s so much difference in complexity to providing this kind of service out of the contingent workforce organization compared to staff augmentation than just chasing rogue spend,” says Stephen Clancy, SIA’s senior director, contingent workforce strategies, knowledge and research. “I’m not saying there isn’t [rogue spend], but there has to be more powerful value proposition statements for getting into this, because of the investment, complexity, and expertise you’re going to require of your MSP or your own internal organization.”
Whatever your reasons for incorporating SOW into your program, planning is key. A helpful resource available to members is SIA’s guide for CW program managers entitled, “Ten Steps to Designing a SOW Management Strategy and Business Model.”
This article is based on the SIA workforce solutions webinar, “SOW and Services Procurement — A CW Program Guide to Success.” A replay of the webinar is available online to CWS Council members.