Projected age of retirement
for current workers.

Data that is false or fabricated.

The best data scientists turn
distilled information into pure gold.

Too much churn and
companies lose the cream.

Guatemala has the largest CW
compared to population in Americas.

1 in 3
# of working Americans in
the contingent workforce.

As some jobs become out of date,
others emerge.

In a conformity string, we call attributes
that impact cost and availability of
qualified job candidates "pieces of work".

Projected growth office/clerical
staffing 2013.

Companies implementing proper
measures during offboarding.

Singapore was world's top CW
productivity market 2014.

Data Scientist: the most wanted
job by employers on LinkedIn
in 2014.

Belgium has the highest tax burden in EU.

Ratio of robots to employees in Korea,
highest level in the world.

Employers who find paying
freelancers cumbersome.

The big star in our universe is Data Centauri.

% of American workforce projected
to be freelance by 2020.

Predictive analysis is only as
insightful as the analysts.

Data should never be sugar coded.

A good strategy stretches without
changing its basic shape.

Average length of unemployment
of managerial candidates.

# of workers with tenuous
ties to employers.

% of senior HR officers identifying
talent management as top HR issue.


To find answers, we formulate questions.
Then question the questions.

< 20
% of private sector workers receiving
employer sponsored health insurance
by 2025.

CW population at average
large company.

France has the highest
tax burden in EMEA.

% of Fortune 100 who’ve
implemented a VMS.

Shortage of US managers able to
analyze big data and make decisions
based on findings.

Amount NHS spends on
temp staffing.

Independent contractors can
be reclassified by Irish courts.

CWS 3.0: November 5, 2014

By Bryan Peña and Christopher Minnick

Perhaps the most consistently sore point in contracting for staffing suppliers is overbroad (sometimes comically so, at least from their perspective) indemnification agreements they are forced to sign in order to do business with some clients.

We see these issues regularly, and want to provide insight so that some of the common pitfalls surrounding indemnification agreements can be avoided when you contract with staffing suppliers. Here are some guidelines to consider when drafting supplier contracts.

Beware Overboard Boilerplates
 If I gore your ox, I should pay. That has been a universally accepted example of fairness for millennia. And that is what a good indemnification agreement does. It makes the party causing harm to compensate for the harm. Buyers should not be reluctant to enter into such indemnification agreements, and suppliers should not avoid signing them. However, buyers should beware of overbroad boilerplates that have suppliers indemnifying for things over which they have little or no control. In fact, many of these potentially overbroad agreements may not even be enforceable under state law. The further the agreement strays from having a supplier pay for harm it directly causes and especially where it has the supplier paying for harm that happens outside its sphere of control, the less likely it is will be considered “fair” — and less likely the agreement will be enforced by the courts in the event a loss does occur.

Tailor the Agreement
Sometimes, suppliers complain indemnification agreements appear to have been copied from another agreement that has little or nothing to do with the services they are supplying. In some cases, this is a valid complaint. Buyers should take the time to tailor their agreements to the services that are to be supplied under the agreement. Not only is it unfair to make a supplier sign an agreement that was drafted for a different circumstance, this may again render the agreement unenforceable. Depending on the state in which an agreement is interpreted, the fact that there is no opportunity to bargain over an agreement also may create enforceability issues.

The bottom line is buyers shouldn’t use an indemnification agreement simply because it is “the indemnification agreement.” They should evaluate the agreement they are using, and be willing to modify it so it actually fits the circumstances of the services being supplied. For example, if you are drafting an agreement to cover a staffing firm’s sourced candidates, do not expect to be indemnified if a pre-identified payrolled resource causes a loss. This is a real-life example. The staffing firm in the situation was not involved in vetting the candidate or doing a background check. As such, it should not be held liable for losses committed, even if a background check would have revealed a history of bad acts.

Use Insurance First
A common feature in staffing agreements is the buyer requires the staffing supplier to maintain certain types of insurance, with certain types of carriers, with certain policy limits. Often, the buyer requires the supplier to have the buyer listed as an additional insured. For claims that are insurable, insurance is far preferable to indemnification. In fact, indemnification is very much like having a supplier act as an “insurer” of the buyer. Where the buyer is able to identify appropriate insurance types and amounts, having an “insurer” serve the role of “insurer” is preferable to having a staffing supplier fill that role. Accordingly, buyers should work with their risk management teams to consider insurance they will require of staffing suppliers, and the amounts of coverage and terms of that insurance. If the insurance is adequate for a particular type of claim, buyers may not need indemnification at all — their risk management needs are served by insurance. 

Beware the “Sign Anything” Supplier
While it is a good idea for buyers to be willing to discuss indemnification agreements with suppliers, and tailor them to fit the particular circumstances of the engagement, buyers should be wary of suppliers that are willing to sign whatever agreement is presented to them. In some cases, these suppliers may be desperate for business, and may be willing to undertake unwise business risks simply to “buy” business. If they signed one potentially damaging indemnification clause, their fiscal exposure as a supplier can be assumed to be magnified as they most likely signed many others. These suppliers may present more risk for buyers than the suppliers that negotiated indemnification terms carefully. If there is an indemnified claim, the buyer, although indemnified, is still a defendant in a lawsuit — indemnification only means the indemnifying party will assume fiscal liability for the other, not take the other’s place in court. This will subject the buying company to all of the brand damage issues associated with litigation which could translate to lost sales as well as potential stock devaluation. Also, and most often missed, there is a risk the indemnifying party might not be able to pay a resulting judgment. Thus, the buyer may have a signed indemnification agreement, with limited or no actual indemnification underlying it — the old “not worth the paper it’s printed on” deal.

The concept of indemnification is about fairness. Indemnification agreements always have been and always will be an important tool for buyers of staffing services. However, buyers should be fair. They should limit indemnification duties to risks the supplier can actually control; use insurance, instead of indemnification, where appropriate; and scrupulously be wary of suppliers that are willing to sign any indemnification agreement put before them. Following these simple rules can help buyers obtain fair and enforceable agreements, at the same time avoiding desperate suppliers.

View on the Staffing Industry Analysts website