The solidification of the contract marketplace resulted in accessibility for businesses when it came to hiring new talent. It offered them access to an ever-growing bank of workers, red tape-free, with massively reduced administration processes.
With the introduction of IR35, businesses with more than 50 employees, eager to take the next step, now must navigate new legislation that includes contracts, worker rights, and taxes. This has left many companies in the dark, with neither the resources nor expertise to tackle the requirements of IR35.
What Options Exist for Growing Start-ups Navigating IR35?
Businesses affected by the IR35 legislation have three main routes to consider when moving forward with contract workers.
The first, and somewhat easiest, the route is to rely on existing in-house skills and talent to produce work that was previously being outsourced. This may also result in taking on more permanent staff if the budget allows.
The problem with this route is the strain it can put on a workforce, as well as stifling the growth of the existing employees and the company.
The second route is investing the time and money in ensuring that the HR, recruiting, and accounting departments are fully aware and comprehensive of the new legislation to prevent your business from breaching IR35 rules.
The third and final route to consider is working with contractors through an established compliant umbrella company, that takes care of all the administration and legislative considerations.
What Do Umbrella Company Solutions Mean for Medium-Sized Businesses?
In a nutshell, umbrella companies act as the intermediary between businesses and contractors.
Once a business has found the right contractor for their project needs, the business pays the umbrella company the contractor’s agreed fees and from there, the umbrella company pays the contractor, relieving the business of any admin or compliance concerns.
The key benefit of an umbrella company is that they also handle administration; they ensure that contracts are signed, the right tax is paid, that the contractor’s rights – sickness and potential holidays, for example – are observed, and that the legislation is adhered to.
This streamlines the process for both businesses and contractors, allowing each to remain focused on their specific jobs at hand. It also continues to offer businesses the option of using contract workers, whilst ensuring that the administration and legality of the interaction are ensured.
How to Attract and Retain Top Contractor Talent
Competition is rife for experienced contractor workers.
This has left a market opportunity to ensure your business is an attractive proposition for contractors. The key factors needed are:
Provide clear and detailed briefs with realistic deadlines
Provide fair and prompt payment (an umbrella company offers much support in this area)
Ensure professional, courteous, and polite interactions with clear channels of communication
Show appreciation for their work. Contractors, of course, are working for money, but demonstrating respect and appreciation for their work will only encourage better quality
Understand that the market is competitive and offers a better opportunity or project than your competitors
IR35 hit both expanding businesses and contractors hard. Though there are challenges presented with the legislation, they are not insurmountable, and the right processes and support can help businesses overcome these temporary obstacles.