Statement of Work - How can this model benefit you if you are an agency?
A SOW that works for you
As a recruitment business you are ideally positioned to capitalise on this model if have a pool of experienced project-based contractors.
Some recruitment companies saw this change coming years ago and started a project based subsidiary company ring-fenced from their recruitment business.
However, to operate this model compliantly, YOU must not only deliver the work yourself, you must actually project manage the work – otherwise this will be deemed traditional recruiting and won’t be a compliant SOW. Remember that you will be taking more risk (but receiving more financial rewards) so your insurance premiums are bound to be more expensive- talk to your broker before delivering this service as this differs substantially from your usual business model of recruitment.
Delivering a service under a SOW
An attractive proposition
Delivering services under a SOW is especially attractive to end clients because as the consultancy providing the service to the end client, you will become the client for the purposes of off-payroll (unless you are entitled to the small company exemption wherein the PSCs you engage as sub-contractors will remain responsible for assessing their own IR35 status), entirely shifting the off-payroll obligations and liabilities from the end client to the consultancy. More and more hiring managers, procurement heads and HR professionals are embracing this model as it entirely removes the IR35 headache from them and they are increasingly understanding that an outcome-led SOW is a flexible and effective model.
Whilst SOWs are incredibly commonplace in the engineering, IT and tech sectors, many industries can, in fact, benefit from making the leap to this new way of working, especially if they deliver their services on a project-basis.
Contents
Explore more of this series
- Part 1. Is there a SOW light at the end of the tunnel?
- Part 2. When a new model isn't new at all
- Part 3. What exactly is a SOW in legal terms?
- Part 4. How can this model benefit you in you are an agency?
- Part 5. What are the advantages of this model to end clients/customers?
- Part 6. What is a genuine outsourced service?
- Part 7. Why end clients need to conduct a SOW risk assessment
Carla Roberts
About the author
The team is headed by Carla Roberts, a dual-qualified (US/ UK) lawyer. who has over 14 years of experience advising the staffing/recruitment industry. Carla was previously Head of Legal for a large recruitment company and also worked as Sr. Legal Counsel for Alexander Mann Solutions. Her career has included another 10 years working in a compliance managerial roles for large insurance companies.
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