How do you know your contract is “working”?

One of the most interesting things I find in working with human nature is the divergent range of satisfaction. We will work with clients who say their vendor is doing a great job; however when we dig into the operation, we encounter excessive turnover, unfair pricing practices, non-adherence to negotiated performance standards and a whole slew of other contract and performance issues.  On the flip side, vendors who are performing well are criticized due to a personality conflict or a misguided perception.

Here are some “unbiased” guidelines, based upon our 17 years in the support services consulting business, on how to know if your contract is working:

  • Do you get monthly or quarterly reporting? If a vendor is doing their job well, they should be begging to get information in front of you to show you what a great job they are doing. Lack of reporting usually indicates there is an issue they don’t want you to know about.
  • Invoicing.  Are the vendor’s invoices timely, accurate and easily understood? If they fail any one of these criteria it usually indicates an issue.
  • Turnover.  Do you have excessive turnover either in management, or if your contract contains a labor component, with your services onsite? Excessive turnover (30% on site, much lower offsite) usually indicates an issue with pay rates, lack of growth, company policies, etc.
  • Not enough turnover.  Say what? Not enough turnover with your onsite personnel is also not a good thing. It indicates a lack of growth opportunities, but more importantly, you are paying the higher cost of these outsourced employees who are staying on your site instead of the market rates that new employees placed at your site would be getting paid.
  • Ask the end users. A good gauge is end user satisfaction – survey, form a focus group, ask at company meetings. Better yet, your vendor should be doing these same things.

If you have a contract and are not sure it is “working”, reach out and ask us. We will probably have a solution that will work for you.