IR35 almost certainly changed the face of the contracting world…worth noting that it’s not even been implemented yet!
Many businesses looked at the updated IR35 regulations as a way to transition interim employees out of the business. Why would they want to do that though? Mainly cost!
For the most part, people seem to think contractors are on a pretty packet but don’t seem to understand why. I myself on many occasions have spoken to candidates, particularly in the finance world (you know, because that’s my market), who have asked to be considered for interim roles…Their rationale?
“I can get nearly double the money for doing the same job. “ – Unrealistic candidate, 2016
Sadly, in some cases that has been correct.
“So why should we consider contractors then, surely I’m better of bringing in candidates to complete the job long term, or bring on candidates on a fixed term contract?!?!”
That is what a lot of businesses have done. Really, how successful has that model been? In short, not very. Why? I hear you ask…
We’re considering two different markets.
Think of it like this, when you book a holiday but the preferred flight times are at an airport on the other side of the country, you would book a hotel right?! You wouldn’t buy a house in Manchester just because you’re flight is departing and returning in Manchester…You wouldn’t even rent a house would you?! You would simply use a proven, sustainable and pragmatic solution to solve the problem.
Staying on the subject of holidays, consider you’ve arrived at your sun kissed destination. Let’s say you’re a frequent visitor to the sandy beaches of Cyprus, basking in the glory of the beautiful mountains of Troodos. Except, you’ve landed in Larnaca, so are on the opposite side of Cyprus. You would just hire a car for a couple of days, or a week. Then you have the flexibility to travel at your convenience, not to mention, what would be a cost effective solution…more cost effective some might say, than buying a car in Cyprus.
If I were moving to Manchester or Cyprus, then absolutely, the obvious choice would be to buy a house or car. Even then, I would still need to visit a couple of times, do the research and recce in order to make sure that the decision I’m making is the correct one. So I would still need to utilise the services of a hotel or rental car. The short term impact and cost of renting these, would completely negate the potential loss in blindly making a permanent decision.
TEMPTING TEMPS TO TEMPORARILY TRANSITION THE TEAM
The treaded C word is coming, so if you’re sick of hearing about it, maybe scroll down a little further.
COVID-19…What has this done to the interim market? Initially, it completely obliterated the contractor market. Most people looked at interim candidates as the simplest and quickest way to free up cash. They were right, it was definitely the simplest and quickest way. Most businesses also realised quite quickly, this wasn’t the right way.
If we think for a moment why the contractor market became as popular as it did…Specialists. There were a great number of specialists in the market such as:
- Transformation
- Systems
- Audit
- Projects
Heavily finance-led, however as I mentioned before, that’s the world I’m in so you’ll have to use your imagination to [Insert industry specialist].
Point is, these interim contractors have completed transformations or system implementations on multiple occasions. They’re experts, specialists, professionals. These are the guys in the know, the ones who have the blueprint to successfully support, or in some cases, complete the project with minimal input from you or the business.
Sure they will cost a little more than a permanent solution, however the question of cost is only ever asked in the absence of value. Therefore, your rationale to recruit an interim shouldn’t be driven by cost, it should be driven by value.
On the subject of cost though, take into account that these candidates have to search for a new job every six months. They have no security of income, so the additional cost of hiring an interim also subsidises the fact they may be out of work for 3 months. Also, take into account, the contractor doesn’t get paid for any day they’re not in work. So when they want to see their daughters’ nativity play or visit their nan at the care home, they lose their day rate for that day. There is also the fact that you’re paying for their knowledge. Knowledge that they’ve experienced and overcome obstacles and situations that will undoubtedly occur whilst they’re working on your assignment.
Okay, so where is the COVID related stuff? How can temps help me during COVID??
In a word…Flexibility!
Truth is, the employment market is extremely volatile. You haven’t become less busy though have you? In actual fact, you’re busier than you have been in a long time right?!
Michael Sharma Group have carried out comprehensive research and polling with Hiring Managers and Candidates, what we have found is very interesting…
- 72% of Employees are putting up with the volume of work because they’re scared of entering the job market.
- 67% of Employees feel unappreciated after taking on more work.
- 63% of Hiring Managers felt like they shouldn’t have furloughed staff because the revenue wasn’t impacted as much.
- 54% of Hiring Managers are working more hours, with the workload being almost unbearable
Interim candidates are a great solution to those problems. For the most part, candidates on a day rate are on very short notice periods, meaning that if there is a downturn in work, you don’t need to go through formal HR processes to end the assignment.
Generally, they’re immediately available, so can start the next day.
You only pay for the contractor for the time they work. Be that on an hourly rate or day rate, it can almost be viewed as a Pay As You Go solution.
Lastly, you can get some very experienced candidates who can do more than just the specialisms you need. Consider a mid-level candidate who could do the junior/admin duties, as well as support with the more challenging tasks too. A very reliable pair of hands who doesn’t require a PDP or any kind of training or development…A ready-made candidate to ease the pressure on you and your team.
As always, Michael Sharma Group are on hand to answer any further questions or discuss the article in more detail.