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Negotiating Strategies for Outsourcing

March 17, 1999
Related Topics: Outsourcing, Featured Article
As companies continue to outsource many of their HR functions, it's important to know how to negotiate contracts with the right vendor. Keep the following in mind:

  • Know your needs and goals.

  • Institute a detailed RFP (request for proposal) process.

  • Specify company/vendor responsibilities.

  • Set detailed performance standards.

  • Determine growth rates.

  • Don't use a vendor's standard contract.

  • Don't sign incomplete contracts.

  • Don't set a reporting system for convenience.

  • Don't neglect your employees.

  • Don't ignore the vendor's motives.

SOURCE: Winning Strategies for Outsourcing Contracts, Personnel Journal (now Workforce), Jennifer J. Laabs and Brenda Paik Sunoo, March 1994.

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