The secret to successful contractor management

Our new Head of Contract Joe Sharp discuss market trends, common pitfalls, how to ensure smooth relationships, and more.

In our latest edition of The Lookout's quarterly report (download yours here if you missed it), we discussed a recent increase in demand for flexible workforce management. If this resonates with you, read on.  

  

Why is the market shifting in favour of contractors?  

“Covid…accelerated market shifts that have outlasted the pandemic, which has been to the benefit of much of the UK’s tech sector but to the detriment of other sectors”, says Integro’s Christian Hickmott to ContractorUK. 

 

It's a complicated market. In one camp we see multinationals like Twitter and Google rightsizing with mass layoffs, to offset the over-staffing they fell foul to during the pandemic boom.  

  

In the other, we see smaller tech companies with niche offerings continuing to make hay while the sun shines, so to speak. Because the pandemic forced digitisation across previously lagging industries, there's a strong need for experienced implementation, transformation, and development staff to get jobs done.  

  

The perm job market isn't pretty right now, though.  

  

"Hiring perm staff is becoming trickier due to rising counter offers and the cost of living pushing starter salaries up," says Joe, our new Head of Contract Recruitment.

 

"For some organisations, there is a growing need for interim and project resource." 

  

UK tech firms are faced with a clear dilemma. There may be a mini-recession on the horizon, but the demand for digital services is still fierce. How can you balance these competing priorities?  

  

A tried and tested way to scale up quickly in the face of demand, without compromising on value or quality, is to engage IT contractors to lead your transformation, implementation, or development projects.  

  

What's an IT contractor? 

For the uninitiated, here's the difference between a contractor and a permanent employee.  

  

Permanent employees 

  • Hired for the long-term  

  • May lack required skills at first but be trained on the job  

  • Hired to perform a specific role, which may change over time  

  • Lots of red tape to be aware of if you need to let them go 

  • Paid via PAYE 

  

Contractors  

  • Hired based on specific skillsets and niche experience  

  • Brought in as short-term resource to complete a specific, short-term job  

  • Can have their contracts extended or terminated without much hassle  

  • Paid either via PAYE (inside IR35) or invoices as a self-employed worker (outside IR35) 

  

What do I need to know about IR35? 

Historically, contractor legislation has been somewhat of a nightmare to navigate. IR35 was introduced in 1999 to investigate one-person limited companies. Specifically, those that - despite being contracted to provide services to companies - were enjoying the tax benefits of a salaried employee.   

  

This led to blanket policies, which your organisation may very well have. Most companies pivoted in favour of only hiring contractors inside IR35. This way, the potential for any "creative" number crunching was reduced. But contractors like working outside IR35 - it's more lucrative.  

  

Get to know the history behind IR35, and what contractor legislation looks like in 2023. 

  

When should I use contractors? 

Using contract talent can be a great way to "bridge" resource gaps, skills deficits, or provide much-needed leadership during a tricky project. Depending on the use case, contractors can be cost-effective, especially in terms of delivery and implementation roles.  

  

How should I go about engaging a contractor? 

Contractors and permanent employees are like twins separated at birth. Structurally, they're the same, but one you see every day, and the other turns up once every couple of years with a new personality and haircut.  

  

Contract recruitment is quick and to the point. Preparatory work up front yields the best result. You should narrow down exactly what the contract will involve and how long it will last, whether it's inside or outside IR35, and your ideal culture fit. 

  

Then, you send a quality contract recruiter out into the market. They'll leverage their existing contract base and conduct resourcing for the role, engaging contractors that match your requirements. Your recruiter then screens their picks and presents the best for you to interview. This is a rapid process: at Big Red, our contractor recruitment cycle sits at around 3 days total.  

  

How do I manage a contractor?  

Going into this process, you should respect the speed at which contractors do business, but also realise the benefits of treating them like one of your own. 

  

Says Joe, "From a management perspective, how you treat your contractors should be the same as the way you treat your perm staff. The more they feel part of the team the better they'll buy into the business and its vision."

 

"You will increase collaboration and the contractor's sense of investment in the project. This has a massively positive effect on productivity and the likelihood of a successful outcome." 

  

There are some pitfalls to be aware of, though.  

  

1. Make sure paperwork is signed well in advance, and equipment is provided. Onboarding needs to be seamless.  

2. Offer the same perks as you would to your perm employees. This is particularly relevant when it comes to flexible working.  

3. Invite them to company socials and incentives. Encourage collaboration and embed them into your culture. 

4. Make sure their performance is reviewed and rewarded as you would with any other employee.  

  

Why does it matter where contractors come from?  

No two contractors are created equal. All the benefits - hitting the ground running, high-value expertise, flexibility - can only be realised if you pick the right person.  

  

Joe expands on this: "As to "why it matters where your contractors come from" - It really, really does! Finding an environment match (industry, scale, technology) is crucial if you want your contractor to hit the ground running."

 

"It also allows you to better qualify them in the interview process. You want a contractor that has honed their craft on someone else's turf, and is bringing those learns and knowledge to yours." 

  

Engaging a quality contractor can be a minefield on your own. Using a contract desk, such as ours, means you get faster access to qualified, screened contractors we know and regularly place. Because we know them so well, we're able to quickly match for culture, experience, technological fit, and more - ensuring project success from the outset.  

  

Interested in learning more about engaging an IT contractor?

Speak to our contract desk: 

  

Jacob Dennis | jacobd@bigredrecruitment.co.uk

 Joe Sharp  | joes@bigredrecruitment.co.uk

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