Contract Management Tips for HR Professionals

Aug 30, 2021
Contract Management Tips for HR Professionals
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Contract management is, in addition to being an HR specialization unto itself, something that all HR professionals are involved in on a daily basis and need to know. It is much more complex than simply drafting, signing, and filing contracts.

It is an ongoing process that involves foresight, planning, revisions, compliance considerations, and strategy. Contract management is a fundamental part of business success. Employees, customers, vendors, and suppliers all benefit from good contract management, and, in turn, so does a business. With that in mind, below are some contract management tips that all HR professionals would do well to keep in mind. 

Stay on Top of Storage and Handling

Contract storage and handling is a fundamental part of good contract management from both a compliance and organizational perspective. A digital contract repository is a key component of document management throughout the management lifecycle, provides employees, suppliers, vendors, and clients with peace of mind, and can have a marked impact on productivity. This is because centralizing everything makes it easier for all employees, and especially inexperienced new employees unfamiliar with the idiosyncrasies or downright disorganization of their employer’s document management, to find and access the contact information they need to do their jobs.

Constantly Review Your Process and Assess Goals

Your contract management process is not static; it evolves with business goals, market realities, and internal ones. This is why the first rule to good contract management for HR managers is a baked-in review process that is constantly reassessing procedures and making sure contract management is aligned with organizational goals. These goals might concern cost savings, risk management, or improved transparency between employees and employers. 


Prior to the review process, it is important to nail down why you want to change your current contract management practices. Shaping a contract management system takes time, and auditing and tweaking it is not something to take lightly. 

Give Employees Access

An employee should always have access to any contract or agreement they have with the organization so that they understand their rights and obligations and so that they are able to leave feedback and make suggestions. Having contracts accessible and open is an important part of contract management for HR professionals because it gives them valuable insight into contract shortcomings, what employees like, what they are looking for, and what might dissuade a potential candidate from signing a contract that is easily addressed and fixable. 

Giving employees easy access to their employment contracts also makes the performance review process more transparent and reduces legal liability for the company. If employees are aware of what is expected of them and managers know that employees understand their duties and contractual obligations, this eliminates tension. 

Leverage Templates

Good contract management also means consistency. Templates with standardized language that have already been reviewed and worked on by your legal department save time and manage risk. Templates also provide a better understanding of contractual obligations. It can also save a business a tremendous amount of money since it reduces the need to recruit costly legal expertise every time a new contract is drafted. 

Two best practices when it comes to contract templates are the use of simple language and avoiding jargon wherever possible. This makes contracts easier to navigate and understand for clients, employees, vendors, suppliers, and other stakeholders. Once the structure of a template is there, it can be changed and updated as needed as part of the review process outlined in the above paragraph.

Automate What You Can

The bigger and more complex an organization gets, the more contracts it has to manage. This is typically the way things go. As this happens, organizing your product schedules, NDAs, service agreements, master agreements, supplier contracts and the myriad other legal documents that you rely on to run your business becomes increasingly challenging and a downright headache without good automation practices in place. Poorly optimized contract automation can also have a significant impact on your ability to manage and stay on top of compliance data. 

A centralized place that you use to manage contracts throughout their lifecycle is an essential part of good contract management. Therefore, it's crucial to invest in a good contract lifecycle management software so you can easily track and manage each stage of a contract. Automation means fewer administrative errors, more productivity, lower costs, and better consistency. It also means being able to produce contracts and get them signed faster, streamlining everything from employment to benefits to client onboarding

Set KPIs

As with anything, it is important to make sure well-thought-out and strategic KPIs underlie all contract management. You need to define performance metrics up-front before designing and signing a contract to ensure that the process is structured in a way that maximizes ROI. An efficiency KPI, for instance, can be used to measure how long it takes to create, approve and finalize a contract. Deadlines met, and the transparency of the negotiation process are two other KPIs that can be measured. 

It is also important to continuously incorporate feedback into the contract management process. This feedback can be gleaned following the signing of a contract as well as during exit interviews with employees by encouraging them to share their experience with the process. 

Stay on Top of Risks

It is crucial that HR professionals, and especially those with contract management specializations and in contract-specific roles, have a process in place for continuously scanning for, identifying, and reacting to risks. This includes risk with respect to things like data and personal information handling, out-of-date information that makes human capital allocation decisions less accurate, and whether or not benefits and compensation are competitive with market offerings to avoid losing high-performing and key employees. 

Have a Standardized Dispute Resolution Process in Place

Disputes will almost invariably arise throughout the life of a contract, especially as businesses contract and expand. When a business grows, employees may feel that they are being asked to go above and beyond what is laid out in a contract without receiving adequate compensation. If and when a business contracts, there may be disputes over the fairness or justifications behind clawing back certain benefits and other cost-saving measures. Good contract management dictates that there is a dispute resolution process in place to make sure these disagreements are handled diplomatically and with the best interests of both parties in mind. 


HR professionals handle and manage contracts on a daily basis and are increasingly responsible for reviewing and improving contract management best practices. Contract management is a highly involved process. It requires constant review and goal alignment, employee collaboration and input, automation, and the use of templates to help standardize, streamline and cut expenses, and good storage and handling to ensure compliance, data security, and ease of access.

If you are an HR professional, the above tips and considerations will make you a more effective administrator of human capital and human resources and a much greater asset to your organization. 

About Author: This article is written by our marketing team at HR Cloud. HR Cloud is a leading provider of HR solutions, including recruiting, onboarding, employee engagement, and intranet software. Our aim is to help your company improve employee engagement, employee productivity, and to save you valuable time!



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