With many companies taking a tentative tone to hiring in 2024, staffing professionals find themselves searching for their next client. If you offer contract services as part of your business model, you may think you have looked everywhere to find new business – or have you? Consider selling Statement of Work (SOW) business to your clients and prospects!
What is SOW business?
SOW is a form of time and material contract staffing used by companies. It is typically used to staff projects, streamline cumbersome processes, and to minimize budgetary constraints. It can also come in the form of fixed price project work. However, many staffing companies only pursue SOW business that is T&M and avoid fixed price projects due to considerable risk factors.
Why do we want SOW business?
As a contract staffer, SOW often yields better margins than rate driven or fixed markup accounts, and because it usually operates like T&M staffing — every hour worked is billed. Additionally, the MSP or internal staffing program doesn’t designate or control bill rates. SOW work also helps us penetrate a client with greater speed, as the process is streamlined by working directly with hiring leadership or the centralized SOW team. It is a creative entry point into an account if you’re not on the client’s staffing vendor list! Further, SOW initiatives can expose volume projects giving us the opportunity to place multiple people on assignment at once. These volume projects are often accompanied with exclusivity to the staffing supplier awarded these roles. Who doesn’t like exclusivity? Finally, SOW contracts are usually a longer duration than contract roles sourced through the traditional contingent labor program.
Why do clients buy using a SOW model?
Why would a client want to buy staff augmentation resources using SOW? What’s in it for them? First, it streamlines their process when acquiring contractors. They don’t work through the MSP or internal staffing program which enables faster hiring. They also have more autonomy with bill rates as they operate independently. Additionally, a project is typically given to one supplier vs. working with multiple staffing companies creating greater accountability on the provider. SOW work typically utilizes a different budget than the traditional staffing budget and lends itself to faster and easier internal approvals. Finally, it is an alternative to pricey Integrators. Why pay exorbitant bill rates to a Professional Services firm when a staffing company can deliver the same resource at better value?
How do I find SOW business?
Finding SOW work starts with asking your clients/prospects if they hire using the SOW model and then explaining the benefits to them. Be on alert for clients hiring in an industry vertical with specific skill sets, as they would be likely to embrace it. Next, specific departments with ongoing needs and high turnover rely on SOW for workers. An example of this would be a large help desk / service desk. Also, listen for volume hiring needs for a specific project. It is a great opportunity to illustrate your ability to service the client on a larger scale. If the client has outsourced a segment of business to an integrator, here is your chance to educate them that a staffing provider can locate the same resources at a more budget conscious price point.
What is the process?
It is crucial to understand the process for the SOW hire from signing the SOW through to onboarding. SOW opportunities can come from multiple buyers. It can originate from the hiring manager, procurement, or upper management. It is best to know who is involved in the decision. Do they have an approved list of SOW suppliers, and is it centrally managed? Conversely, the hiring leadership may have autonomy to write a SOW directly if it is not a centrally managed function. Finally, what is the specific contract, work order, or PO we need to review?
Understand the boundaries
Every staffing company has a different tolerance level for risk. Know the parameters. Does it need to be written strictly as T&M staff augmentation? Do you want to manage project outcomes and deliverables? Often times staffing suppliers don’t want to write work instructions, perform wide scale analysis, or offer warranties on work. Working with your client and your internal leadership will help you craft a solution that sets you apart as a subject matter expert and not a staffing generalist. SOW T&M business exists in most companies. Don’t miss the opportunity!
