HR contracts: how to create, manage and automate them

Contract process
February 29, 2024
min
HR contracts are the stepping stone between a great candidate becoming a new hire, so how you manage them matters.

What are HR contracts?

HR contracts are legal agreements used by people and talent teams to create, or update, terms of employment. Once signed by both the employer and employee, these terms become legally binding, outlining:

  1. What is expected of an employee throughout their role
  2. How the employee will be compensated for their work
  3. The various rules each party need to adhere to throughout their relationship

Types of HR contracts

The most obvious category of HR contracts are those that set out the terms of employment for an individual. These are commonly known as job offer letters or employment agreements.

However, there is another, broader group of HR contracts to consider. These are legal documents that would usually be managed by or through the HR team, but don't go into detail about an individual's roles and responsibilities.

This bucket includes contracts like option agreements, NDAs, variation letters, salary increase letters, and so on. These are often created at scale.

Who is responsible for managing HR contracts?

Also known as employment contracts, HR contracts typically sit with the human resources team. That function can include a separate people team (for existing employees) and a talent team (for hiring new employees).

But people and talent teams aren't the only stakeholders for HR contracts. The hiring manager for the role often helps to outline the terms and package covered in a HR contract, alongside other stakeholders from the legal and executive teams (depending on the seniority of the role).

This involvement can be in the form of an approval workflow or a signature. In some cases, legal teams will even review and update the templates used to create HR contracts  to make sure they are legally sound.

But the collaborative nature of HR contracts means that other teams can quickly become a bottleneck for hiring or promoting employees.

Fortunately, CLM software can solve most of these problems and make generating and managing employment agreements quick and easy. Juro's CLM tool for HR teams automates routine contract admin and reduces time-to-hire by up to 75 per cent.

You can find out more about Juro by hitting the button below. But if you're interested in finding out more about HR contract creation and management first, read on.

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Common HR contract management challenges

Contracts that offer jobs to new joiners should be an exciting communication, creating a relationship that’s exciting for both sides. Unfortunately, many companies still miss this opportunity and send out uninspiring offer letters that read more like a legal ass-covering exercise.

In a competitive market for talent, attractive HR contracts could make the difference when it comes to landing a great candidate, or missing out. Here are six tips to make sure your offer letters stand out:

  1. Use readable language: don’t bamboozle your new starter with dense legal jargon. Make it concise and friendly.
  2. Nail the details: convey practical information like start dates, line manager name, first payday, length of probation, and so on. Don’t leave unanswered questions that might create doubt as to whether they should sign.
  3. Make it personal: refer to their particular interview process - what was it about them that impressed you so much?
  4. Brand it: don’t just send a boilerplate Word document. Make it a brand-compliant document with rich text elements like animation (if your contract editor allows it).
  5. Don’t ramble: brevity is usually a good thing, and if they worked really hard to keep their CV to two sides, you should probably do the same with their offer letter.
  6. Automate it: you can make a huge impact on your time-to-sign metrics by setting up a contract workflow with automated templates for offer letters.

How to automate HR contracts

Forward-thinking businesses like Deliveroo and Curve have automated their offer letters, by using contract automation to handle these documents entirely in-browser. That means no printing and scanning, and more signing.

An automated workflow looks like this:

  1. Set up templates: the HR and legal team define the terms of the master documents in contract templates,  which users will create offer letters and contracts
  2. Set up approvers: whoever owns the process should have approval rights over contracts being sent out
  3. Users generate contracts from templates: HR team members can use a natural language Q&A to generate compliant contracts from templates
  4. Internal collaboration: relevant stakeholders internally add their input
  5. External negotiation: this isn’t common, or is minimal, on employment contracts, but negotiation can take place in-browser for speed and efficiency
  6. Electronic signature: contract automation platforms like Juro offer mobile-responsive secure eSignature on any device
  7. Post-signature management: features like date reminders, analytics, search and so on are available for post-signature contract management

There are lots of benefits of an automated contract workflow for HR teams:

  • Faster time-to-hire: HR teams automating contracts can reduce time spent on paperwork by 75 per cent
  • Better visibility: visual timelines make it easier to track HR contracts’ progress, and in-browser digital documents end the problem of version control
  • Better candidate experience: branded, dynamic digital documents that can be signed on any device offer a better experience to candidates

Check out Juro for HR teams to find out more.

How to manage HR contracts

Contract management covers the parts of the contract lifecycle that take place post-signature. To manage these contracts effectively, it’s important to look for features that do the following:

  • Integrate: by integrating contracts with the ATS (i.e. Greenhouse, Workday, Lever) you can make sure data is always in sync
  • Provide analytics: monitor the key metrics in your offer letter workflow to see when and why candidates are delayed in signing their contracts
  • Set date reminders: use custom date reminders to keep track of key dates that relate to the contracts - renewals, end of probation, end of notice periods, and so on

By moving HR contacts to a browser-native, collaborative automation platform, businesses can make great strides in efficiency and in progress against their hiring metrics.

If you’d like to find out more about ending the headache of paperwork for HR teams, hit the button below to get in touch. Otherwise, why not download some of our free HR contract templates?

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