SOW: It’s Here, There and Everywhere

If buyers love it, can staffing firms be far behind? No, I am not talking about customers’ appetite for cutting costs, but rather the fascination with anything SOW — statement of work consultants.

This year, for the first time, we surveyed staffing firms about SOW and found that they are pursuing statement of work consulting with a vengeance. And it’s not just in IT or engineering; it’s in other segments like office clerical and industrial as well. SOW is no longer just the exclusive ambit of specialist companies like Wipro,Infosys and Tata Consultancy Services

What firms are engaging in SOW? The survey revealed that different dynamics come into consideration.  Overall, forty-seven percent of traditional staffing firms do at least some SOW; the median percent of total revenue from this segment is 10 percent. Of course skill segments do still make a difference, penetration in IT is the highest, and larger staffing firms are also more likely to do SOW.  Among companies with less than $10 million in sales, 35 percent have some SOW. Among companies with $500 million or more in sales, that rises to 82 percent.

The numbers are not startling given these facts. What’s not to like about SOW? These consultants are easy to manage (i.e., you don’t manage them); you only pay when they deliver.  Too, they are not your employee so you don’t run the risk of misclassification.

And buyers are liking it more and more. Staffing Industry Analysts asked buyers going forward what types of labor they plan to use over the next two years. They replied that they were going to make the biggest investments in SOW.

The SOW boom is on.  It may just be the next evolution in staffing.