Article previously appeared on Mainstreet.com (2009)

Companies of all sizes have historically relied upon their workforce to provide the flexibility necessary to compete.  Unfortunately, compensation and benefit costs have created a dilemma – business can’t afford to commit to full-time, permanent employees. While competing means responding to customer demand, it also means not committing too early (or permanently) to resources you only need for a short time.

Scaling Up Your Business

To grow the business you must find the balance between putting in place the resources needed to grow and the cost of those resources. Move too early or too late, and there go the profits—and possibly your business. So how do you have the flexibility to scale up your business, respond to opportunities and not have a permanent commitment to resources?

Contracting for Services

You need an expert with a specific skill set, but you don’t need those skills 24/7/365. Contracting for those services makes sense—when you can effectively, efficiently control the costs, define the project and manage those resources for the your organization, projects and business.

Employees serve as the backbone of the organization, stabilizing the company. Scale and flexibility for large projects and acute needs come from the advisors and ad hoc experts. To achieve the maximum results from your ad hoc resource, it essential to have a comprehensive, written agreement that is suited to the situation and the business needs.

5 Keys to Creating a Flexible Work Agreement

  • Understand the nature of the relationship: The type of service provider dictates the type of legal agreement and can determine whether the agreement is partially or fully enforceable. The wrong agreement can leave you unable to enforce protection of your intellectual property and other rights.
  • Define the project scope: When hiring consultants, independent contractors or professional service providers, be very specific about specific project, roles or responsibilities that they are being hired to fulfill. The more defined you can make the project and the role, the more accountability can be built into the relationship.
  • Define the deliverables and timeline: In addition to defining the project’s scope and role, clearly define measurable deliverables, timelines, and delivery dates. It is also good to include consequences for missed deadlines and poor quality. The deliverables should be specific, measurable and contain quality standards as appropriate for the product.
  • Define reporting and performance: If your organization requires the person to interact during the process or needs information in order for other aspects of your project or process to work, make sure you include those requirements in the agreement.
  • Define terms, timing, method, and all aspects of payment: Make sure you spell out how, when, and if you will pay. Pay only for performance. Are you paying by the hour? What documentation does the person need to provide to get paid and in what format?

A well-written agreement is critical to protecting your business and ensuring performance of your flexible workforce.  Your business reputation is on the line (and so is your bottom line).

 

Copyright ©2009 Lea A. Strickland, MBA CMA CFM CBM

 

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