Contract Corner: Who Was This? Handling employee turnover – technology and sourcing @Morgan Lewis

In any service relationship, the continuity of the service supplier’s workers usually impacts the standard of service. Extreme account turnover can negatively have an effect on day-to-day operations and skill to reply to issues. Workers recruitment and administration is primarily a enterprise problem that rests with the service supplier. Nonetheless, there are necessary provisions that may be included in service agreements that may assist deal with these points.


  • Suppliers ought to present common reviews (eg, month-to-month or quarterly) on turnover charges for participation, together with charges for particular classes of workers or providers, particularly for large-scale participations.
  • Worker turnover must be mentioned frequently throughout conferences between managers and governance committees, together with a evaluate of the packages carried out by the service supplier to retain workers within the consumer’s account.
  • Service ranges associated to worker turnover could be created. For instance, the service stage could be structured with an annual share of gross sales that “doesn’t exceed” and is usually based mostly on the expertise of the market and the service supplier (this may be an necessary a part of the RFP and due diligence course of previous to contract execution). The method of adjusting service ranges to account for adjustments in service, market, and repair supplier expertise will also be included with the account.
  • If the service supplier’s turnover exceeds the service stage, the settlement shall present for options, together with requiring the service supplier to report the explanations for the extreme turnover, present a plan to scale back turnover to fulfill the service stage, and specify durations of time throughout which such discount might be achieved, and/or Granting service stage credit for extreme turnover.


  • Coaching service supplier personnel on each providers and buyer necessities is important and might cut back the influence of worker turnover. The service supplier and the shopper should agree on the required coaching and which components of the coaching fall on the shopper or the service supplier (the coaching descriptions and tasks must be specified within the settlement).
  • Coaching also needs to be mentioned frequently throughout conferences between managers and governance committees, together with any wanted changes for service enchancment or different adjustments. The service supplier shall maintain data of all trainings and certifications and the shopper shall have the fitting to audit these data.
  • For service supplier personnel coaching offered by the shopper, within the occasion that turnover charges exceed service ranges, the service supplier could also be required to reimburse the prices of extra coaching required for the shopper.

Private key

  • Turnover charges should not the one issue that may have an effect on providers. The standard of providers usually will depend on a subset of the service supplier’s workers (key workers) who’re thought of necessary to the shopper based mostly on service administration, institutional information, or sturdy relationships between these people and the shopper.
  • The contract should determine these key personnel. Though the service supplier will understandably wish to management the recruitment, administration, and substitute of key workers, the contract can present sure processes to scale back the influence of worker turnover:
    • For instance, the contract can present the consumer with the fitting to take part within the audit course of previous to the project of key personnel to the consumer’s account, reminiscent of CV evaluate and interviews.
    • The contract also can present advance discover of any change in key personnel and, in sure circumstances (notably throughout transitional durations), present that sure key personnel will stay within the buyer’s account for a minimal time frame except they’ve ceased to be employed by the service supplier or now not Capable of carry out his duties for well being or comparable causes.

Though the shopper himself can not stop extreme turnover, these provisions could be added to the service settlement to assist deal with points as they come up.

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