How to hire via a Statement of Work (SOW): Outcome-Based v Time and Material (T&M)


April 22, 2024

According to HR Magazine, a quarter of UK employers (26%) said they are planning to freeze all hiring in 2024, and a further 27% reported significant cuts to their recruitment budget. This correlates with our recent survey that found that 57% of tech leaders have a hiring freeze in 2024. 

Due to IR35 reform, plugging the gap with agency contractors is not an easy solution but there is another way to hire contingent talent compliantly.

Statement of Work (SOW) hiring can be an effective way to reduce costs. Specifically, transitioning from Day Rate Contractor or Time and Material (T&M) SOW to Outcome-Based SOW presents a significant opportunity for cost savings. Many recruitment companies offer this as a service but often it is just contract recruitment in disguise. True SOW hiring can be very effective if implemented properly with a platform like Gigged.AI which provides transparent SOW hiring.

Let’s look into what these terms mean and how making this shift can benefit your organisation financially at a time of cost cutting.

Understanding Time and Material SOW

Time and Material SOW is a traditional procurement model where businesses pay for the time spent and materials used by the external supplier to complete a project. This model is useful when you are unable to define and scope a clear project. Many procurement teams prefer for these engagements to become Outcome-Based quickly. This can be facilitated on Gigged.AI.

Embracing Outcome-Based SOW

Outcome-Based SOW, on the other hand, focuses on delivering specific results or outcomes. Payments are tied to the achievement of these predefined objectives, not the amount of time or resources expended. This model incentivises efficiency and effectiveness, aligning to the goals of the client.

Cost Savings with an SOW model 

The shift to an SOW model can lead to significant cost savings in several ways:

  • Reduced Waste: By paying for outcomes rather than time, businesses can eliminate the wastage associated with day rates where work might be stretched to fill the available time.
  • Enhanced Efficiency: Contractors are motivated to work more efficiently and innovatively to meet the defined outcomes, potentially reducing the project timeline and associated costs.
  • Predictable Budgeting: With clear deliverables, businesses can predict costs more accurately.

Gigged.AI’s Transparent Costing Advantage

Gigged.AI’s Open Talent Marketplace is an easy way to hire either on a Time and Material (T&M) or an SOW. Cost savings come from the transparent costing model offered by platforms like Gigged.AI. Traditional staffing firms often charge a markup of 30% or more for SOW work, significantly increasing project costs. Gigged.AI stands out by charging only a 15% markup for Outcome-Based SOW, offering a more cost-effective solution for businesses looking to maximise their budget. All vetting and compliance is included in the fee.


In conclusion, shifting to either Time and Material or Outcome-Based SOW not only aligns project goals with business objectives but also offers a clear path to cost savings. With the added advantage of transparent, reduced margins from platforms like Gigged.AI, businesses can further optimise their expenditure, ensuring that every dollar spent contributes directly to tangible, valuable outcomes. This strategic approach to project management and procurement is essential for businesses aiming to thrive in a competitive, cost-conscious environment.

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