Contractors, consultants, freelancers. However you define people working for themselves, there are now fewer of them than before the pandemic.
Covid and changes to IR35 legislation are thought to be responsible for 400,000 people moving back into employment, retiring or becoming economically inactive.
Of those that remain, just over a quarter have entered the self employment market since 2020, perhaps deciding that working from home and the increased flexibility experienced during lockdowns was hard to give up. So, essentially there are fewer contractors out there overall and a significant number that don’t bring years of experience in the contracting world.
If you’re leading a business transformation programme, you’ll know how hard it has become to find the right mix of skills for your project team. Niche contract specialists are in high demand and can often pick and choose the projects they work on.
The Harvard Business Review sums up the reality. “The problem most companies face in executing their digital transformation is not access to technologies but a shortage of workers with digital and data science skills. The demand is growing faster than the supply.”
Management consultancies that employ teams of consultants to deliver change programmes face the same recruitment problems. This can sometimes leave clients with project teams that lack the appropriate technical competencies.
You may decide to hire teams of contractors instead – but so are all your competitors. So, what can you do to persuade these elusive top-notch consultants to choose your project? The answer lies in understanding who they are and what they care about. Contractors have chosen an uncertain and unpredictable career path for a reason, and their motivations may be very different from your own.
Based on our own experience of tracking down the best of the best, we’ve outlined some key points to consider.
Don’t let an overly cautious approach to IR35 put off the best people
Since the changes to the off-payroll legislation were introduced in 2021, we’ve seen tax and compliance departments introduce sweeping bans on using ‘outside IR35’ contractors. This risk averse approach has tied the hands of change leaders. Previously well remunerated consultants are reluctant to take the drop to their rate of pay that is involved with working inside IR35 – in fact, over half of contractors have recently rejected an offer of work due to it being deemed to be ‘inside IR35’. With the cost-of-living crisis still biting, money matters more than ever.
An alternative is to work with a consultancy that has developed solutions based on the delivery of Statements of Work, that keep tax liabilities away from the client and allow for attractive rates of pay. If your organisation isn’t exploring these solutions, you will continue to struggle to build teams of the very best people.
Don’t fear flexibility
The swing back to working together physically has happened. Project leaders understand the benefits of teams being able to collaborate and build relationships in person and many are demanding three or four days in the office.
However, contractors often choose their way of working for the freedom and flexibility it offers. They prefer to work from anywhere or to spend a percentage of their time on side hustles or personal pursuits. Working parents and carers have become used to combining the school run/walking the dog with work commitments during lockdown and are not giving it up easily. In our experience, insisting on too much physical presence in the office can cause highly sought-after people to walk away.
To make your project as attractive as possible to the widest range of people, consider whether you can be more flexible. Ask yourself whether a temporary team can be treated differently to permanent employees, and whether a clear set of deliverables will ensure you get the performance you want rather than a number of hours worked. Is your insistence on being in the office due to a culture of presenteeism or lack of trust?
Be clear with your expectations
Most of us who’ve worked in IT or change management will have encountered a consultant working under the radar and perhaps cruising a bit. When pressed, managers might struggle to articulate what they’re working on, or what value their engagement is expected to deliver.
Fortunately, this is rare these days and most consultants are motivated by fast paced environments, achieving goals and improving their own skills. Indeed, it’s the ability to be highly focussed and see success quickly that attracts people to the lifestyle.
Therefore, it’s important to nail down your project scope, design, governance and specific deliverables to keep people motivated and accountable. If you don’t have the time to create detailed Statements of Work, partner with a supplier who employs experienced project managers for exactly this purpose.
Don’t forget pastoral care
There is a view that the wellbeing of temporary project staff is not the responsibility of the client. Consultants are well paid and should therefore just be expected to get on with things, right? To a degree, yes. But they’re also human and might have any number of stresses in their private lives that could impact their performance at work. Without paid sick leave, contractors are also more likely to power through a physical or mental challenge.
Checking in on the wellbeing of consultants is not just a kind thing to do, it’s commercially wise too. Grievances or difficulties can be nipped in the bud and small adjustments might make all the difference to their levels of motivation and commitment. Similarly, if your consultancy partner isn’t doing this as standard, you should be asking why.
In an economic environment where project leaders are still experiencing skills shortages, companies need to be mindful of not letting fear or non-compliance restrict their ability to put the best people on their projects.
There are ways to tackle this, to keep compliance teams, project leads and contractors happy. If you’re not looking for more enlightened ways to manage your next project, your competitors probably will be.
Don’t get left behind.
Will Larcombe co-founded technology and change delivery consultancy Stellarmann, formerly William Alexander Consulting, in 2020, with his business partner Alex Colwell. Part of the Wellcombe Group, the company was launched in response to a growing demand for highly skilled, flexible and scalable contract teams to deliver technology and change programmes. Will and Alex have also led technology and business change recruitment firm, William Alexander Recruitment since 2010.
Will learnt his trade in recruitment and business solutions, having graduated from Leeds Beckett University with a degree in business information management. He leads on the vision, values, and strategy for both Stellarmann and William Alexander Recruitment, as well as driving sales and revenue. He has helped William Alexander Recruitment cement its place in Recruiter Magazine’s HOT100 (the most productive recruitment firms in the UK) for nine consecutive years, as well as helping guide Stellarmann to a £22m turnover business in its first three years.
