Whether you’re an employer or an employee, it’s important to have a clear understanding of the key components of a staff augmentation agreement. These include the scope of work, payment terms, compensation agreement, and non-disclosure agreement.
Non-Disclosure Agreement
Whether you’re a startup company looking to hire a developer or an established business looking to hire a freelancer, you’ll need a Non-Disclosure Agreement for staff augmentation to protect your confidential business data. If you don’t have one, you could be opening the door for data leakage and possible legal action.
It’s important to understand that a non-disclosure agreement doesn’t just prevent parties from getting sued, it also allows them to work together. It’s an easy way to protect your important business information. However, it must be taken seriously. If your employee violates the agreement, you could be looking at sanctions and potential monetary remedies.
The NDA may also explain which party will pay the attorneys’ fees should a dispute arise. The right kind of NDA will also contain provisions pertaining to the appropriate uses of confidential information.
Non-Compete Clause
Defining a competitor by name or geographic region can be a good idea, but it doesn’t make it an effective non-compete clause. When an employee leaves a company and starts a competing business, it’s important to have a non-compete clause in the employment contract that gives the company protection from the former employee.
A non-compete clause can also be useful in protecting the company from employees who have stolen client lists or trade secrets. However, the non-compete clause should specify a reasonable timeframe. It should also mention an industry and a geographic region.
For example, if an employee works for a staffing agency, a non-compete clause might state that the employee cannot work for a competitor within two years of the employee’s departure. However, the non-compete agreement should not be used as a way to punish the employee for leaving the company.
Scope of Work
Typically, an outsourced staff augmentation partner adds IT specialists or other staff to fill in gaps in the company’s technical expertise. In the end, this results in increased efficiency and effectiveness for the internal workforce. In addition, outsourcing allows companies to concentrate on core business instead of technical requirements.
Outsourcing is ideal for companies with limited technical expertise, such as software development teams that support customer-facing operations. However, this type of outsourcing can be risky, depending on the industry. For example, a major semiconductor company lost months of augmented staff costs, due to a hefty level of complexity.
Companies looking to outsource their IT staffing needs should ensure that their vendor meets strict industry requirements for project outsourcing. In addition, they should ensure that the vendor’s team is capable of meeting project milestones and deliverables.
Compensation Agreement and Payment Terms
Using a Staff Augmentation Service is a great way to increase agility and responsiveness to changing enterprise needs. However, not every scenario is suitable for using this staffing model. Moreover, it’s important to weigh the pros and cons before engaging in a staff augmentation program.
A good place to start is by looking at the most common issues that plague companies when they have a large contingent workforce. First and foremost, it’s important to ask your hiring manager to complete an evaluation. This will help you address any potential issues before they become a problem.
A good staff augmentation provider will also be willing to negotiate a long-term agreement. Moreover, you might want to consider leveraging the services of a managed service provider. This type of service has a defined deliverable, and you’ll be paid upon completion.
Modifications or Change Orders
Whenever you are preparing a Staff Augmentation Agreement, you may want to consider incorporating changes and/or change orders. These are essentially modifications to your original contract. They can be initiated by your Company or by your client. They can affect the time and cost of your project. You may also need to include changes in sites and facilities, as well as changes in specifications and equipment.
Before a change or change order can be executed, you must first make sure it will be authorized. You must follow certain state law requirements. Whether your project is state funded or not, you will need to notify the appropriate approval body.
If your project is a state-funded Minor Capital Improvement, you must first obtain approval from the Office of the President. If your project is Chancellor-approved, you must also follow the Facility’s approval process.
