Statement of Work contract: are your processes up to date?

Statement of Work contract arrangements is becoming an increasingly popular means of engaging contingent workers.

Why I hear you ask?

As the business community scrambles to cope with the changes brought on by COVID, the need for innovation, and competitive advantage, has heightened like never before. With profits dropping and overheads choking the bottom line, organisations are turning to highly skilled contingent labour to deliver fast, accountable results.

And the Statement of Work implications, are proving to be hugely advantageous in this setting providing they are managed right.

Today, I want to cover the advantages of a Statement of Work engagement, what Statement of Work best practices look like, and how Statement of Work contract engagements could be the edge your business needs today.

What is a Statement of Work Contract?

The beauty of the Statement of Work contract is that it’s designed to offer specific skills and expertise for the organisation looking to deliver on a specific project or business outcome. So under the contract, the organisation will engage a contingent worker (or workers) to perform pre-determined tasks or work on a specific project. Once that work is done, the worker is done with the current project for the host organisation.

It’s intended to engender commitment to the outcome and to the quality of work delivered, from the worker.

Pretty tidy arrangement.

It’s also a win-win scenario in the current working era, where workers are increasingly seeking contract work, as this continued growth of non-employee labour has forced the hand of the traditional business model. Now, organisations are becoming far more adept at contracting and networking projects, rather than boosting full-time headcount.

All these circumstances have forced a shift in the employment market, driving the popularity of the contractual agreement known as the ‘Statement of Work contract’.

“95 percent of organisations today perceive their contingent workforce as important and vital not only to day-to-day operations, but also to ultimate enterprise success and growth.”

Ardent Partners

What are the Benefits of a Statement of Work Contract?

The Statement of Work contract can potentially be seen as a complex arrangement. But, when it’s done right, it’s a compliant, accountable, manageable means for your business to reap maximum ROI from your investment in contingent workers.

The Statement of Work contract offers a unique, dual alignment in the working relationship between the organisation and contingent worker.

In the first instance, it’s is specifically aligned to your business goals, project parameters and desired strategic outcomes.

In the second instance, it’s aligned with the worker. This includes their needs, personal independence, and their desire to work across a diverse range of assignments and organisations. Statement of Work contracts also typically command better remuneration for the worker.

Research from shows that organisations who consistently operate under Statement of Work contracts achieve higher returns on their talent investments. And importantly, they acquire access to specialist, in-demand workers who bring the vital intellectual property to the project.

Statement of Work Contract: Best Practices

One of the primary success measures of a Statement of Work contract, is legislative compliance. With the increasing complexity in employment and workplace legislation, maintaining a compliant contingent workforce can be tricky.

In addition, there are other risk factors that go with the territory of contingent labour. These include IT security risks, intellectual property risks, privacy risks, and in the era of COVID, the risks associated with remote workforces. All these risks point to the need for an essential best practice regime, in managing Statement of Work contracts.

In working with some of Australia’s biggest corporates, we have devised a four-part system for managing Statement of Work deliverables, so that the organisation and their contingent workers, remain compliant while mitigating risk.

Our approach offers Statement of Work for consulting services, IT, business services across most commercial service industries.

The Four Pillars of Managing Statement of Work Contracts

Pillar 1: Supplier Aggregation

The Statement of Work purpose is to define the narrative of a specific piece of work that must be delivered under the Statement of Work contract. Therefore, the suppliers to the tri-party relationship must each be on board with the definitions of the contract, and the deliverables to be achieved.

When your business is working with a contingent labour partner (like CXC), you can expect a robust supplier aggregation process to take place. This is a fundamental component of the Statement of Work contract, and includes:

  • Service provider qualification, vetting and onboarding: pre-selection and vetting of service providers aligned to your company’s Statement of Work needs
  • Contract creation and administration
  • Decision support to ensure the correct classification of the work opportunity

Pillar 2: Resource Management

The nature of the project Statement of Work, calls for accurate, timely, effective and compliant resource control. In partnering with a specialist provider, this component of the best practice approach includes:

  • Onboarding and offboarding of Statement of Work contingent labour
  • A compliant onboarding procedure. This includes screening the contingent worker, review and confirmation of their right to work, their correct classification, and ensuring adherence to relevant policies
  • System access with your organisation, including both onsite and offsite. Assets and materials control such as technology hardware, phone and any other materials relevant to the project

Pillar 3: Milestone Management and Payment

The Statement of Work project document will clearly state the project milestones, parameters, deliverables, timeframes and scope. This crucial documentation underlies the Statement of Work purpose. Here are the key factors to consider to achieve best practice milestone management:

  • Statement of Work contract tracking, measurement of work undertaken, and approval adherence on all stated project deliverables
  • Ensuring the Statement of Work worker receives accurate payments throughout the life of the contract. This is based on milestone achievement, the time taken to deliver those achievements, and where relevant, materials used. Obviously, the parameters vary from contract to contract
  • A consolidated approach to invoicing and payments makes the process of contract cost management simple and straightforward

Pillar 4: Reporting and Analytics

Arguably the most crucial element in the Statement of Work contract, reporting and analytics provide the proof of project milestones and success. Best practice in managing reporting and analytics includes undertaking the following actions:

  • Spend transparency including project tracking
  • Onboarding and offboarding task completions
  • Asset tracking

The Statement of Work contract offers organisations greater control as well as significant risk mitigation. And for remote, diverse workforces, operating cohesively requires a central conductor of regulation and quality management. By focusing on the contract deliverables and project outcomes, the organisation can optimise their talent, asset and project investments for a successful project outcome.


As one of the world’s leading providers of contingent worker management solutions, CXC is well positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across five continents and decades of experience, we can assist with every aspect of your program.

If you would like to find out more about how we can help, please contact us here.