April 13 - 16, 2026
JW Marriott Las Vegas Resort & Spa
For any organization using contingent labor, the statement of work is foundational for the relationship. It's a formal document that describes the work to be performed and the deliverables to be expected. As contingent workforce programs play a bigger role in the labor pool, the SOW has never been more important. We'll look at some of the key components of an SOW that reflect the latest contingent labor trends.
The term "scope creep" developed as a result of poorly designed SOWs that did not adequately cover the scope of the work involved. Typically SOW workers are deployed to complete well-defined deliverables. You should designate whether the SOW is time-and-materials based, design/detail based, or performance-based. Also, the SOW should be tied to the vendor's Master Services Agreement.
Your SOW should define success based on your precise expectation so that during the engagement performance can be monitored and adjusted as necessary.
Develop and communicate a schedule for everyone involved, which should be shared with all resources. Build in milestones and meetings for any course corrections or updates that may be necessary. Periodic corrections can help reduce scope creep and keep the project on track.
SOW workers should be focused on their deliverables, but should not be micromanaged. The client is paying only for the deliverables, not the employees' daily activities.
The contingent workforce provider bears the risks involved with completing the deliverables for a fixed price. This section should lay out expectations quantitatively, such as software that satisfactorily performs certain functions. The deliverables should be more specific than tracking activity conducted within a certain time period.
The SOW should include payment milestones for the project. One of the advantages of using SOW workers is a fixed cost compared to variable labor costs with other types of contingent workforce management.
Be sure to specify outcomes that are expected as a result of the program. Otherwise, you may pay for many hours spent on tasks without results to show for it.
Service level agreements can link performance to payments to share the risk with the contingent labor provider. Ensure that milestone payments include some assessment of the quality of work completed so far. The SOW should establish the legal status of the personnel involved so they are not misclassified as temporary or full-time workers.
Contingent workforce management will become an even more important factor in many organizations' human capital management strategies. That's why crafting an SOW that will accomplish your organization's goals is a vital skill indirect procurement directors should possess.
These contingent workforce management trends and more will be front and center at ProcureCon Indirect West 2018, taking place at the JW Camelback Inn Resort & Spa in Scottsdale, AZ, this September.
Download the agenda today for more information and insights!