Formalizing a service contract for local jobs

Hiring contract workers for local jobs used to be a faux pas: better to outsource, thought companies. And, yet, there are trends in small business models that show it’s more effective, long-term, for businesses to hire locally for local jobs. Learn how to formalize this agreement and make it official.

Why Hire Contract Workers Instead?

Domestic contract workers are no longer part of an “informal” economy. Therefore, businesses should not think twice about dipping into the pool of local talent and outsource work to contract workers instead of full-time employees. Under a service contract, the contract worker could come equipped with very specialized skills that would significantly reduce the amount of workload on full-time employees as well as lessen the pressure to learn an entirely new technology, process or task. Hiring contract workers with a service agreement also keep long-term costs low as there isn’t a significant amount of investment – through benefits and health-care or professional development – to keep the worker on payroll. In a sense, a contract worker is a quick payout for a job or task fulfilled. This means the business can hire out while keeping focusing on the larger deliverables.

How to Formalize a Service Contract

To formalize a service contract, a couple of things need to be in place. This is in order to promote transparency between the employer and contract worker, ensure the work is done up to the required standards, and the contract worker is paid. A successful service contract will allow the contractor to work with the company well and, potentially, long-term, in a mutually beneficial arrangement. So the service contract should be as specific as possible with the “creative brief” so that there is no scope-creep. The service contract should also mention, in as detailed a way as possible, what the deliverables for the project are and when delivery of service is expected by. It should outline the amount of involvement (through meetings or check-ins) the job or project will require, if applicable. And then, it should proceed to payment terms and clauses on cancellation.

Any service agreement is subject to negotiation and it’s not surprising to learn that most local contractors will want to negotiate a contract. Expect to come to the table and listen to the “ask” but be prepared to counter-offer. Especially if these local workers are skilled and experienced, there is a greater demand for them and a greater flexibility in job choice. So make it worth their time by negotiating contract demands while keeping the company’s bottom line intact.