With the constant talk about the looming election in the UK, the economy and business activity is coming sharply under the microscope. Many are talking about the changing nature of work and the workforce that will be required to support that ambition, and as such much is being discussed about flexible talent resources.
Specialist Talent
Specialist and professional interims are typically used for one of 2 reasons; capacity within the existing workforce is too stretched and additional resource is required, or the capability to complete a specific project is not held within the existing team. It is these circumstances that typically lead to a business seeking interim support.
There are broadly, 2 ways of engaging this interim talent. Either on a fixed term contract basis (FTC) or on a daily rate basis. An FTC works for a defined period of time, normally with a notice period attached to the contract. Key elements include:
- The pay is equivalent to that offered on an annual salary basis, pro-rata’d for the months of the assignment.
- Most employers think of this as the cost, but we also must factor in employers NI contributions, holiday pay, pension & other benefits costs too. This can typically add a further 38-45% on the salary cost of the hire (depending on the generosity of the benefits) and must be taken into account.
- The talent pool available for FTC work might ultimately be looking for permanent work and therefore gaining their commitment for the full duration of the FTC can be tricky to mitigate.
With an interim paid on a daily rate basis, you have the benefit of only paying for the work they complete.
- As professional interims you tend to attract specialist skills that hit the ground running and are used to picking up the work requirement very quickly.
- By wrapping benefits allocation into daily rate paid to the interim, it can attract a higher level of skill and capability, often getting the work completed quicker.
- Daily rate roles offer a greater flexibility of contract as the employer – you only pay for the days worked, typically with only 7 days notice on both sides.
- If payment is made through a 3rd party (i.e. an agency such as HR Heads) they will manage all the deductions and payroll costs of inside IR35 contractors. If the scope of work is deemed to be outside IR35, the payment through a 3rd party de-risks and benefits from the off-set regulations that came into effect April 2024.
Marketing Insight
In a recent poll conducted by our Interim Management team at ProcurementHeads, rapid access to expert skills emerged as the top-cited benefit (61% of hiring managers), and 25% most valued the fresh perspective and insight that a skilled interim managers brings. Equally, they found that a telling 89% of the interim managers who responded were only interested in operating via a daily rate engagement. 51% indicated they would be prepared to work on an inside IR35 basis provided that the rate and remuneration stacks up. However, 38% were only available for work outside IR35 given the difference in the operating models, with a 3% minority indicating a preference for a salaried FTC instead.
This seems contrary to what the hiring managers are asking for, yet this presents a mis-match in the market between the interim management talent’s availability and method of remuneration versus the clients needing this talent.
Our advice therefore, it to really understand what is driving the need for the interim specialist. If it is simply covering a role for a period of absence, an FTC might suffice. However, if you are wanting quick access to specialist skills, you should be looking to remunerate on a daily rate basis, whether inside or outside IR35 to attract the best talent possible.
Get in touch today. 01962 432001 speaktous@hrheads.co.uk
