The growth of the contractor market has played an incredibly significant role in shaping the UK’s economy over the last 12 months. And for some industries, notably IT and construction, the demand for skilled contractors is showing no signs of slowing. More people than ever are seeking opportunities that provide greater flexibility than a traditional 9-5 ‘job for life’ style of working; one of the defining factors influencing the employment landscape of today. However, with IR35 changes on the horizon and Britain’s imminent exit from the EU, the only certainty for the contractor market over the next 12 months is change!
These are the thoughts and takeaways from a Resourcing Think Tank (RTT) held on Friday 10th February 2017 hosted at NTT Data by Andrew Groves (Head of Recruitment) titled ‘Managing a Large Contractor Pool’
The following summary has been prepared to reflect a segment of the discussion held amongst senior HR and Talent Acquisition professionals from leading national and international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.
During this Think Tank we asked the question ‘what do you want to get out of this event?’ I had a varied number of responses such as;
- Can we adapt the process we do for permanent employees to contractors?
- How do we reduce the risk to the contingent workforce?
- How do you embed contractors into the business?
The pros and cons of hiring contractors
We spoke briefly around the pros and cons of allowing contractors to work through offshore accounting or whether you make them become a registered company in the UK. This cropped up due to a horror story around a company being stung by a rather hefty HMRC bill due to taxes not being paid by a contractor and it falling back on the company. What was agreed at the end of this debate was that there is always going to be a risk but you do have ways to minimise the risk. Take for instance using an agency, which will be governed by ongoing vetting from HMRC.
Managed service providers came up a lot in this respect. They give you all the governance, reliability, audit, and it covers onshore and offshore workforces. My opinion was that this would be the safest way to move forward and I think that this opinion was echoed around the room.
Preparation is everything when it comes to picking who you want to work with. You need to pick a company that is aligned to and understands your culture. Next comes the implementation. Plan the implementation down to the smallest of details. If this means working backwards to make sure you get everything you need, then do it! Figure out your outputs first. Then work out how to achieve those.
Feeling the love not just on Valentine’s Day
Okay so once you have found a contractor you want to hire. How do you keep them? Do you offer them what you currently offer your perm employees? I am going to go out on a limb and say no. Then the question is ‘why not?’ They work for you. They are your brand ambassadors. Why should they not be entitled to what you offer everyone else? If you make them feel a part of your company then surely they will put even more effort into making their time a success.
Do you make decisions around your permanent workforce without consulting them first? Again going out on a limb, I’d be fairly confident in saying you don’t (however I would love to hear case studies of those who do!). Then why do companies not consult their contractors on how they want to be treated? This will automatically enhance the relationship. I imagine they bring in a lot of revenue to your business, so treat them like they do.
How to increase the likelihood of a contractor working for you again
This goes back to the point that I made earlier around how you treat your contractors. From the start, do you have the same recruitment model for them? And is on-boarding the same for them as it is for permanent employees? In a lot of companies I speak to, it isn’t. HR has nothing to do with contractors in a lot of instances and the ones that do have involvement in their hiring and on-boarding would likely admit that the process is at best disjointed. Contractors are often seen by HR as a favour to a hiring manager and are seldom taken through a consistent process. Why? If HR doesn’t have a chance to embed a new joiner, whether that be perm or contract, will it be as successful a hire as it could be? Probably not. How do you get the cultural fit right if they haven’t been on-boarded successfully? I find it crazy that you can be spending all this money on people, but not actually investing any time into making them better members of your workforce.
Let me set the scene; you have just hired a contractor who is really eager to impress in his new position. After three months they are performing in the role really well and you are impressed with them. The six month contract comes to an end and you don’t have another position for the contractor so they leave never to work for you again due to timings or other circumstances. Now imagine while you had that contractor in role you also took the time to invest in up-skilling him/her. Now you have a contractor who can do several things in your business and wants to stay as you have invested in their career development. Is that a world you would like to live in?
A big question remains… how do you actually measure all this? Do you even know what to measure in regards to knowing what a successful and unsuccessful hire looks like? The first thing (which I’ve mentioned before) is know what you want as an output and then work backwards. This way everyone knows what it is you are looking to achieve, then you can plan the inputs that will work through to the agreed outputs. You can also put in some health checks along the way so you know you are on the right track before you get to the end and realise it didn’t work out as intended. At Resourcing Insight our expertise lends itself to helping achieve this and getting the business as a whole to work towards one focal point / overriding objective.
I feel the gap between perm employees and contractors is still as big as ever and this will need to change. With so many more people pursuing contract opportunities due to the work/life balance appeal, we need to make sure we offer contractors an attractive all-round package; above and beyond financial remuneration. The amount of people that now choose roles over money is huge. People are less willing to settle for a job they don’t enjoy and we see many individuals opting for roles that might offer a smaller package but provide a better overall ‘experience’. If a contractor doesn’t like working for you, they are likely to share these negative experiences in the market, which will cost time and money to repair; making it harder to attract contractors into your workforce. This again stresses the importance of creating the right culture and on-boarding these contractors successfully. Treat your contingent workforce the same as any other members of staff. They are after all your brand ambassadors.