Taking stock of IR35
A couple of weeks ago I took a call from the MD of an interim private sector focused recruitment business, who was starting to consider the potential impacts of the planned IR35 changes. As a recruiter servicing the private sector, this was not an issue he had had to consider until very recently and the fear, confusion and anger in his voice took me straight back to 2016 when we, in the public sector, were forced to consider all the same issues. It got me thinking about what the impact has been in reality and how we have learnt to adapt to the reformed regulations.
Rewinding the clock almost two years, my team and I spent days, weeks and months preparing for the changes and there were predictions made at that time which have definitely been realised. Most notably there has been an increase in the cost of interim managers; we have observed the loss of good interims to the private sector or to retirement and furthermore we have experienced palpable turbulence in the market, particularly in year one.
From a Solace perspective, one unforeseen change has been the shift in the size and shape of the candidate pool. Now that many interim roles are deemed to be in scope of IR35, the distinction between career interims and non-career interims (those candidates who were in between permanent jobs) has all but disappeared. As a result we have seen the candidate pool grow from a distinct group to an expansive pool of flexible candidates, who move fluidly between interim, permanent and fixed term roles. This fact in itself has fundamentally changed the way we operate our interim business at Solace.
Our principal task prior to the changes was building and maintaining our pool of career interims. This involved continually identifying, interviewing and vetting interim managers to join our talent pool. Then when a client requirement arose, it was simply a matter of pulling together a list of pre-vetted candidates to submit. Post IR35, the process is very different; the potential candidate pool is so extensive that a wide range of search methods are used for every role and the level of screening and due diligence needs to be far quicker and far more robust, for those candidates not pre-registered.
So, how can you ensure a successful temporary appointment in this new world? First and foremost research and understand IR35 and its implications on you, whether you are an interim, the recruitment agency or the organisation seeking to fill a vacancy. If you are looking to bring in short term support, ensure you fully understand the regulations and the terminology used in the HMRC online tool to avoid incorrectly labelling an assignment one way or another. If a role is genuinely out of scope of IR35, it should be offered as such. It is likely to cost you less and the pool of candidates you will be offered will be wider, so there are commercial benefits to consider alongside any ethical and legal implications. Don’t forget, when you are using an interim provider, the liability for this decision lies with them and not you so there is no benefit to be gained from being overly cautious.
Secondly, ensure that you work with an interim provider who understands the regulations and can offer guidance and support. IR35 may not play a leading role in your day job but the same cannot be said for recruiters; if you are not using your interim provider as a sounding-board on these issues, you are not getting full value for money.
Thirdly, when you’re instructing a recruiter to support you with an interim gap, give a considered and detailed brief. The more information a provider has about a role, the more effectively they will be able to narrow down a longlist of candidates to fit your requirement. A standard job description is rarely helpful in these circumstances as it’s the detail around the team, the culture and the expected outcomes and outputs that tell the real story. A ten minute phone call or briefing meeting is always far more effective than a job description alone.
Finally, a swift and organised recruitment process is essential when trying to secure interim candidates under the reformed regulations. It is likely that candidates will be considering a number of very different opportunities and may also be weighing up the potential benefits of permanent opportunities as well as interim, so a protracted or disorganised interview process may impact negatively on your ability to secure a candidate who has skills that are in high demand.
So, while its clear that the IR35 changes have impacted the interim world significantly, with a dedication to learning the regulations inside out, expert support and advice and a conscientious and agile recruitment process, it is still very possible to appoint experienced and committed interim managers to drive change and deliver projects in the public sector.
Jessica Mullinger is head of interim management and operations at Solace in Business