by Guy Morley
I think any company would agree with the assertion that all projects are not created equal. Some require a few hours or days worth of time from a single employee, while others require much more time, resources, and manpower. Some of these latter projects require more than what the organisation has readily available. In these cases, it is common to hire contract workers to get the job done.
With new updates to IR35 legislation (which you can read about in our blog post here) coming into effect in early 2020, the face of contract labour is changing. As a result, many businesses are rethinking how they hire contract workers, with many turning to work package solutions, or Statements of Work (SOW). But what are SOWs, and what are the benefits? How can changing working practices may impact the way your project or business is delivered?
What is a Statement of Work?
Typically when recruiting specialists for projects - contracts are agreed on time . SOWs offer an alternative to this model. Instead of being based on hours worked, SOWs are output-based contracts governing a project. Fixed costs are allocated to a specific set of milestones, deliverables, or achievements. Goals are clear from the very start, as is the expected compensation.
SOWing the Seeds of Productivity: The Benefits of Statements of Work
A SOW provides businesses with an alternative to traditional contract work, and may be beneficial for projects that need to be delivered in a specific timeframe and for a set cost. While hourly contracts might work for certain organisations and projects, a SOW drives staff towards reaching goals and objectives. Since compensation is based on hitting agreed-upon targets within specified timeframes, there is a stronger push for employees to maximise their productivity and achieve their objectives. Some organisations may find that this model works best for them, as it may provide more value for cost and time.
What’s Included in a SOW?
Typically, the SOW is offered and managed by a company with specialist or Subject Matter Experts, Advento has such arrangements with specialists who can deliver a range of projects. Understanding the needs of their clients, a package and contract is developed that best reflects what is required. A SOW package will vary by provider and by the project scope. A typical package usually includes a dedicated representative who oversees the team, pricing and invoicing, ongoing management of aspects such as compliance and delivery, and regular reporting. Choosing the right package and provider will enable the business to focus its attention elsewhere, reduce risk, and trust that goals are being met in a timely and effective manner.
What About IR35?
As mentioned, there are changes coming to the existing IR35 legislation in April 2020. Some companies will still prefer the contractor model for delivering projects. Medium and large organisations will become responsible for assessing the employment status of their contractors. The organisation will need to determine whether their contractors will fall inside IR35 or outside. This is still a bit of a grey area for businesses as they begin to prepare, but partnering with a qualified recruitment partner can be a big help during this transition period. IR35 requirements can be included in the SOW package if desired. Of course, it will fall to the end client to decide its stance on IR35 and to develop a Status Determination Statement (SDS).
If you are still unsure about what IR35 might mean for your business, we can help. Advento Staffing have partnered with Parasol Group to offer advice and support around the new IR35 legislation, and are offering companies a FREE one-hour face-to-face advice session with our experts to prepare. Additionally, we have developed both an Assessment Tool for roles deemed outside IR35 and a FREE Business Impact Tool to assess the risk with current contract burden. These assets are a great place to start.
Advento Staffing has been supporting clients with their Digital Technology, Data, Cyber and Change transformations for nearly 9 years. Providing both permanent and contingent labour solutions, our clients trust us in supplying high quality candidates and solutions.
With the IR35 regulations coming into play, we are being asked to offer our services with Statements of Work for projects. Advento is well placed to support them with our large talent pool of specialists, through Advento Soutions we are partnering with specialist consultancies who can offer a full 360 solution within projects.
Contact us at email@example.com or on +44 (0) 1892 512494 to find out more about how we can support you and your business.