A common description of well-negotiated contingent workforce program agreements are that they “sit on the shelf and collect dust.” This may ring of some truth in slower-moving, staid marketplaces, but in today’s business environment the only thing that is constant is change. Hence, contingent workforce agreements need to be positioned for the inevitable change that will occur and include guidelines for how that change will be managed.
Certainly standard agreement clauses items such as termination, escalation, liability, confidentiality and work product ownership are familiar with basic contract frameworks. Some of these clauses are are used in times of distress and need significant resolutions to problems that are threatening the core purpose of why one or both members of parties entered into the agreement.
But other clauses manage ongoing change that naturally takes place in the marketplace, such as a change in statutory expenses, ownership of your MSP/VMS/staffing partners, new government regulations, market downturns, the price of oil drops by more than 50%. Change is constant and needs to be managed in an orderly fashion.
CW program agreement clauses such as assignment, transition assistance, no suspension, work product ownership and statutory expense/price change requests. These clauses and others set the rules of how change will happen or in some cases will not be allowed to a certain degree. These clauses define how the parties will act in a change event and what the process steps might be to execute the change.
In a highly fragmented marketplace, mergers and acquisitions happen all the time. One day you sever your relationship with a disappointing MSP solution partner. Six months later, your new workforce solutions provider is bought by the “disappointing” MSP solution provider organization, setting you back to square one. But a change clause such as “assignment rights” in the CW program agreement would allow you to control how this change event is conducted and perhaps even decide not to allow a change to the disappointing supply chain partner.
Contingent workforce agreements should also assist in the ongoing monitoring of health in the parties to the contract. The staffing and supply chain partners will be the parties to the agreement that will give buyer’s reasonable and confidential auditing visibility to the risks that they can bring to the CW workforce solution they are participating in.
And then there’s co-employment, one of the biggest areas of concern for organizations. Some of the risk can be mitigated through one’s corporate benefit plan participation definitions, but noncompliance to employment law, discrimination regulations, exempt/non-exempt violations and privacy rules can cause risks. Hence, including reasonable auditing rights in your agreements is critical. Some auditing methods can even be automated, such as getting notice of cancellation of required insurance coverage directly from the insurance provider. Similar to reviewing performance SLAs and related KPIs, it is also important to identify and audit additional items related to risk in the CW program partner contract.