The roles of human resources manager and contract manager are different from each other, as each position demands distinct skill sets, knowledge, and experience. However, some of their tasks may slightly overlap in certain instances. To answer the question above, let us look closely at contract management and the duties of a contract manager.
What is Contract Management?
Contract management is a vital part of every business as it involves managing all contracts that enable the company to work with suppliers, partners, vendors, customers, and employees. To illustrate, we will break down the lifecycle of contracts into stages.
First is initiation, wherein a company propositions to enter into a business relationship with another entity, creating the need for a contract. Next comes negotiation wherein the two interested parties decide on a mutually beneficial agreement, followed by approval, which occurs when the parties sign the contract. Under execution, the deal goes into effect but remains subject to review within a stipulated timeframe, leading to the final stage, which is renewal or termination.
In the human resources setting, contract management involves the creation of employment contracts that mutually benefit the employee and the employer. Contract management works to minimize, if not prevent, any legal-related issues that may arise from ill-written employee contracts.
In a nutshell, the most important aspect of contract management is ensuring that the company enters into profitable and financially successful business partnerships through the creation and execution of sound contracts.
What Does a Contract Manager Do?
Contract managers administer, direct, and coordinate every contract-related aspect of a project, from negotiating with potential partners to writing the agreement to record-keeping and evaluating outcomes of a project. As experts, contract managers guide and train project managers and other operational staff when needed. As the middle persons, they see to it that the company maintains a healthy relationship with their partners and that all parties involved, including employees, continue to comply with the terms and conditions of the contract. Contract managers also report relevant findings to various stakeholders, consult with finance regarding the economic impact of contracts to the business, and work with legal to warrant the agreements are legally binding.
Most importantly, contract managers ensure that all contracts entered into remain beneficial to the company. They identify trends, analyze risks, and keep track of the salient points of an agreement to carry out process improvement when necessary. The analyses, reports, and research of contract managers immensely influence whether or not a contract will be renewed, extended, or terminated.
Who Should Be a Contract Manager?
While contract management is an essential part of HR, the job of a contract manager is not for everyone. In addition to having exceptional interpersonal, leadership, and negotiation skills, contract managers should be able to interpret and analyze legal documents and financial reports, as well as comprehend and foresee operational risks to help them protect the business. There are specialist courses for contract management that can be taken online and are more than worth looking into whether you are looking to move into contract management or you have to manage contracts as part of your current job. Gaining the extra skills and understanding the role better will stand those dealing with contracts in good stead.
Therefore, excellent risk management skills that come with an in-depth knowledge of the business process and a strong understanding of agreements are necessary competencies for contract managers to have. Furthermore, contact managers should possess outstanding collaboration skills as they work with various groups, both internally and externally.
We go back to the question: should the human resources manager also be the contract manager? While it is often practical and inexpensive to utilize one person for simple and basic contracts, more complex deals should be handed to the person who possesses the required content-specific expertise and has trained in contract management.
Author: Gerard Smithers.
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