Surviving Recruitment Armageddon

by Adam Goulding

Armageddon is approaching for the contracting market!! Or so many would have you believe; however, the fact is that come April 2020 and beyond contract workers are still going to be in high demand as interim work still needs to be fulfilled. We will all survive!

Our thoughts are that it’s it a bit like Y2K all over again and when we wake up on the first IR35 business day of April it will all be fine. OK, maybe a more serious analogy is that it is more like GDPR day 0 when things are essentially the same bit it just works a bit different. Relative to either analogy it will all be OK come April 2020 and the contract world will still be turning…but only if you are suitably prepared and up to speed on what this means for you and your market.

For the recruitment market in general we will have to adjust and act accordingly primarily in terms of structuring the payment methods for each vacancy to satisfy [where applicable] HMRC.

The mechanics of then recruiting for that vacancy remain the same as they have always been in that the job pays what the jobs pays and subsequently recruiters go to market to a pool of suitable applicants to submit a shortlist to their clients for said job. The alternate scenario is that the contractor charges what the contractor charges and then recruiters communicate to their clients that this skill set now costs £x more than before to account for the tax requirements.

Either way the mechanics are the same in that recruiters have a budget from a client and a budget from a candidate to work and negotiate with. It’s not too different to how it has always been in that respect and recruiters have never held the decision on the payment dynamics.

Employers can and will still need to hire temporary workers for maternity covers, secondment covers, projects, year-end…etc, etc and this is not going to change. Equally there is still going to be a huge population of interim workers who want to continue to work as an interim for a multitude of reasons: lifestyle, nature of work, varied experiences, visa requirements – just to name a few.

In short, what IR35 does not mean is that employers can't hire an interim/temp/contract worker after April 2020. They absolutely can and will.

The IR35 changes simply mean that when employers hire an interim/temp/contractor and said role is inside IR35 that worker is then bound to paying tax and so must be paid accordingly via a PAYE model and not via a PSC.

End clients / employers need to ensure they are working with trustworthy, compliant and diligent agencies to ensure that this is communicated and managed correctly. And interim workers need to be working with trustworthy, compliant and diligent agencies to ensure that this is communicated and managed correctly in terms of the dynamics and amounts they get paid.

There will be plenty of challenges and bumps in the road but let’s be honest there always is Lehmans and Brexit to name two monsters we survived; the main challenge here is acquiring the correct knowledge around all the potential ways of contractor pay and the subsequent communication to both clients and contract candidates. If recruiters take the time understand all the details, then we should all be good to go.

And come April 2020 there will still definitely be a need to go so ensure you are ready to do so.