By Mark Ladds – Director, Interim Practice
2020 sees the start of a new decade and there is plenty happening this year alone. Last Friday saw a conclusion to the 3½ year saga that is Brexit, this summer sees Tokyo host the Olympics, November will see another nail-biting US presidential election and, possibly beating all of those (just!), this year sees the official launch of Tucker Stone’s dedicated Interim Practice.
I was delighted to be offered the opportunity to lead this new practice and we’re all extremely excited about how this additional offering will complement the already excellent work our team of HR search consultants have been providing the market for many years now.
As part of this I will be sharing insight on topics pertinent to the interim market in each of our newsletters and there is nothing more talked about at present than the imminent implementation of IR35.
Whether you have worked in the interim market for many years or are just exploring it for the first time, you will no doubt have been subjected to a barrage of information over the last 6 months – some of which can leave you with more questions than answers. From my perspective, the response from companies to this impending new legislation has been anything but universal. Whilst some organisations have opted for blanket bans on engaging with contractors, others have worked to find viable solutions to continue utilising this resource and some, perhaps worryingly, appear to be almost unaware of its introduction altogether.
What is IR35?
IR35 has been introduced to tackle two key elements:
- To dissuade companies from engaging with Limited Company Contractors in order to avoid paying Employers National Insurance
- To deter Limited Company Contractors from performing permanent roles but paying less tax
It broadly came to be known as the ‘Friday to Monday’ phenomenon where employees would leave a company on the Friday but return to the same role in the same office on Monday but engaged as a contractor through a Limited Company.
It’s could be easy to throw our hands in the air and claim that “IR35 will have a devastating impact on the interim market” I, however, think it worthwhile clarifying that this legislation does not mean companies cannot engage with contractors. They need to be sure as to why they’re utilising a consultant and, a number of organisations I’ve spoken with have said that, if anything, it has made them properly clarify why and how they should engage with interims – not that they will stop this practice altogether.
What do they mean by this? Whilst we can’t ignore that interims have, on occasion, been used to plug permanent gaps on an almost indefinite basis, many are utilised in a very different way. The interim manager should be a flexible resource, vitally important in times of change or indeed in a business where a particular skillset, at a particular time, simply doesn’t exist. For example, many high-growth start-ups often don’t have even the basics from a HR perspective let alone any subject matter specialists, so being able to bring these skills into the business, often to provide a blueprint of what’s potentially needed or lay the foundations for someone to take over longer term, is essential. There are many other scenarios – mergers, acquisitions, change or restructures for example – where specialist skills will continue to be required on a short-term interim, or a specifically defined, timescale.
What might this mean for the market?
With the continued growth of the “gig economy” and businesses often trying to operate on leaner structures, the idea that the interim market will disappear is unlikely. What it will do is focus organisations on why they’re utilising certain skillsets and create clearer ‘projects’ for interims to fulfil.
The vast majority of interim roles that we’ve been asked to work on over the last 6 months have almost entirely been of a project nature with clients providing clear guidelines as to what the interim is to deliver, in what timeframe and both parties have an understanding before the work starts as to what success looks like – particularly important and beneficial for clients who want to ensure ROI for bringing an interim in to the business.
Whilst I suspect it will be a slightly bumpy first 12 months as both interims and clients find their feet with these legislative changes there are no signs that the death knell is about to ring on the interim market.