Even for the most organised HR manager (or startup leader with few employees yet), managing contracts can be tough.
Yes, these documents protect your company from legal trouble. Still, their inefficient management is unacceptable — and it costs companies an average of 15% on projects.
Want to help save that instead?
Start by implementing contract lifecycle management (CLM) in your HR department. That’s by using HR software to manage HR-related contracts better.
Still unsure of what is CLM software?
In this article., let’s get to know CLM and the software designed for this task. Without further ado, let’s start.
Why do contracts and their management matter?
A contract is a legal agreement between two or more parties entering a relationship — like an employer and employee. It ensures that the parties involved understand their respective roles and the consequences of failing to comply.
It can cover a wide range of topics, including:
- employment relationships like employment contracts, internships, and NDAs
- sale or purchase of goods/services
- partnerships
- service
- leasing
To get the most out of contracts, efficient management is needed. As for HR managers, effective contract management helps reduce the time it takes to prepare and execute HR-related documents such as employment contracts for global employees.
That’s not all. Here are three more key benefits of good contract management for you.
Legal compliance
Almost all HR-related documents are subject to legal and regulatory requirements, such as labor laws and employment regulations. Effective contract management ensures that every HR contract you produce complies with legal requirements.
Risk mitigation
HR-related documents contain sensitive information—and that must be managed carefully to protect both the company and the employee. Effective contract management can help ensure that all HR-related documents are properly stored in a secure environment, which reduces the risk of data breaches.
Operational efficiency
Effective contract management processes help HR teams manage the employment relationship. Keeping track of key dates, such as contract renewal or termination, HR can ensure that contracts are properly updated and renewed. It improves HR operations and reduces administrative burdens.
Further reading: Top HR trends to make human management more effective in 2023
In summary, contract management is essential to ensuring that contracts are properly executed, monitored, and enforced throughout the contract lifecycle.
An overview of a contract’s lifecycle
Before you truly understand contract lifecycle management, it’s best first to understand the contract lifecycle.
To put it simply, the contract lifecycle encompasses all the stages a contract goes through — from creation to execution and beyond. Understanding a contract’s lifecycle also means effectively managing your contracts.
A typical contract goes through the following stages:
- A request and intake process
- Creating drafts
- Collaboration and negotiation
- Reviews and approvals
- Execution and signatures
- Commitments, amendments, addendums, renewals, and terminations
- Reporting and auditing
- Archival
Could you streamline the processes involved in a contract lifecycle? Learn how to automate the different phases of contracts by reading this article.
Let’s go over them briefly:
A request and intake process: This is the first stage of the contract lifecycle, where someone identifies a need for a contract. It involves gathering relevant information and defining the scope of the agreement to meet the needs of all parties involved.
Drafting: The next stage involves the creation of the contract. The drafters or authors of the contract will work on creating the document.
Collaboration and negotiation: After the initial draft is created, the contract may go through several rounds of collaboration and revision between co-workers, colleagues, or other teammates.
Reviews and approvals: Following the agreement, a contract will go through multiple reviews and approvals by hiring managers, legal counsels, and business stakeholders.
Execution and signatures: Once all the reviews and approvals are completed, the contract is ready for execution. To do this, you must get signatures from all the parties involved in the contract.
Commitments, amendments, addendums, renewals, and terminations: Upon execution of a contract, the parties involved must comply with its terms and conditions. Depending on the circumstances, a contract may undergo amendments, addendums, renewals, or terminations over time.
Reporting and auditing: During the contract’s lifespan, it may be necessary to report on its performance or conduct audits to ensure compliance with the terms and conditions.
Archival: After the contract is complete, the document must be archived under the company and law’s record retention policies and legal requirements.
However, automating the workflows involved in each contract stage is only possible through the help of technology — contract management software. This is a tool designed to streamline your HR processes connected to managing contracts.
Say hello to the software called CLM. What is CLM software?
Getting to know CLM software
Basically, CLM is short for Contract Lifecycle Management Software. The platform helps organisations manage agreements> by automating every phase of the contract process. That’s end-to-end management of the contract lifecycle from a single platform.
Here are some interesting facts about contract management software:
- HR department saw 83% faster drafting of contacts using CLM
- Market projections show that the global market for CLM solutions will reach $3.47 billion by 2030.
- Digital contract management can improve compliance by 55%.
Since your daily task involves various HR contracts (like employment documents, HR policies, job offer letters, and confidentiality agreements), this is tedious if handled manually. With CLM software, HR managers can automate contract workflows and ensure compliance.
Here’s how CLM typically works for you:
CLM lets you create and store contracts digitally while also automating the process between pre-post contract execution. It can also integrate with other HR software, like HRIS systems, to further streamline your workflow.
If you’re now interested in CLMs, you need to get to know Avokaado modern CLM! This is the CLM well-suited for HR managers like you. Look at the benefits listed here.
What Avokaado can do for HR?
Avokaado CLM software is a digital tool built to manage the entire contract lifecycle. So, it’s the perfect tool for HR, who deals with a lot of contracts regularly.
We listed how Avokaado benefits your department:
Streamline employee lifecycle
Part of an employee’s lifecycle is the recruitment to onboarding/off-boarding. Avokaado accelerates drafting employment agreements, NDAs, and contract termination letters by providing pre-made templates that already contain the necessary clauses needed for each document. Moreover, each template generates a questionnaire-like document for easy input of your unique information.
Standardize HR documents
The consistency of branding across company materials is one of the key advantages of standardising HR documents. Through Avokaado, you can add the branding and style of your company to every template you use. Also, you just have to set a theme once, and all documents drafted based on that template will have your pre-defined styles.
Better compliance
Managing compliance-related HR documents such as NDAs is a breeze in Avokaado. Aside from requiring you to include standard clauses before completing a draft, there’s also a downloadable activity log every time you create an Avokaado aDoc. This means only contracts that comply with company rules are released, and maximum document traceability is available.
Improved visibility of HR contracts
Need to see and store all that important employee documents? Avokaado’s central contract repository is the secure source of truth for you who regularly need employee information (and even for employees requesting access to their information).
In addition, you also have unfinished HR contracts, right? Let the platform’s workspace view help you track the status of drafted contracts and receive real-time notifications from a teammate preparing that new agreement.
Increased efficiency in managing HR-related contracts
If you hate hunting down reviews and approvals, you’ll love automated workflows from Avokaado. The contract management software speeds up the contract review and approval process by automating the related tasks. When it’s time to submit your drafted contract to the stakeholder and other hiring managers, you can simply add them to the role, and they’ll receive the automated alert for the task — without leaving your desk.
Accelerate the contract lifecycle with eSignatures
You already know how crucial it is to get a remote worker’s signature — more so when hiring globally. Here’s where Avokaado shines. It reduces the time it takes to complete the signing process and enhances security by allowing remote signing using eIDAS-compliant digital signature providers — SignNow and Dokobit. Result? Prompt and compliant contract execution.
Use Avokaado CLM now
No matter how important, contracts are most beneficial if managed properly — the role of a good CLM.
Still asking, what is CLM software? Again, it’s the tool to simplify the contract management process, helping you save time executing HR-related contracts.
Here are more benefits of contract management:
- Legal compliance
- Risk mitigation
- Operational efficiency
Need CLM to assist you today? You can count on Avokaado CLM.
Avokaado provides a range of benefits, such as automating time-consuming processes for organized yet secure HR contracting.
Ready to experience these benefits and more? Make your HR processes faster with Avokaado – book a demo today!
