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Hire Permanently or Go Temporary, Stick or Twist?

29th August 2018

Hire Permanently or Go Temporary, Stick or Twist?
Hire Permanently or Go Temporary, Stick or Twist?

Last week I blogged about how I thought firms needed to work closer with their recruiters and the ‘pile ‘em high, sell ‘em high’ approach just wasn’t working for all parties. I stick by this. We have recently agreed to work with a firm on a project exclusively which means we can invest more of our resources, time and effort in getting a great outcome. I mentioned that the ‘first past the post’ basis just creates all the wrong behaviours and ultimately outcomes. 

So, we will take that as a given, for now. Let’s look at the knottiest of problems and particularly for small firms around hiring. You need a Project Manager but the permanent salary could be anything between £70-£100k and that’s before you take into account all your on-going costs, Pensions, NIC, holidays etc. It can add anything between 40-80% on top of the salary. This is of course working on the assumption that Bob or Mary the new PM will be a resounding success. It will probably take at least six months to work out if they are any good and if they are brilliant, can you retain them. It is fraught with danger!

Ok, let’s go for temporary resource, an interim or contractor, the ultimate flexible resource, when I don’t need it, I turn it off, when I do, I turn it on. Brilliant!  Again, there are flaws in this. There is little point in investing in the temporary resource as they won’t be around. You will pay a premium for the flexibility, cheaper than permanent but still not cheap and they will most likely be very focussed on getting the project closed off rather than turning their hand to other stuff. 

Or use a hybrid model,as we have done at Formation, mostly permanent but with some fixed-term contract and some temps. We also overlay this with full and part-time hours. It means we have the resources where and when we need it. Perfect? Err… no. There are some flaws in this model too! It takes a lot of organising and you also need to be disciplined as it is too easy to roll Frank the PM on from week to week when maybe the work doesn’t demand it. We think it’s the best model out there. 

More critically and I will use this phrase just once, the over-blown and over-hyped ‘Gig Economy’ has taken a grip in the Workplace but maybe not in a seismic way. It has become a short-hand catch-all for zero-hour contracts and minimum wages, Deliveroo, Uber and Call Centre work. It started as something funky with all the upsides of building skills, experiences and knowledge quickly bypassing the classic career path. However, recently it has adopted something of the night about it, which is a shame as the principle is sound. However, the resulting court cases for drivers, supermarket workers and the like has tainted it. 

So, is it changing the UK and if so, how? 

The Office of National Statistics stated that the number of self-employed people had risen by 45% since 2001 and last year the number of self-employed workers in the UK stood at 15%. Not insignificant. 

I met a Contractor a few months back who has moved to Crawley to do a large PPI Complaints project. She said that in the three years that she has been there, rents had gone up 50% because of the project locally bringing in lots of contractors to the town. She thought that landlords had “made hay” but when the project ends early in 2019, there would be a mass exodus resulting in a drop-in rents and empty accommodation. A result of the gig economy in action. I don’t know the exact numbers of contractors working in what we can call the PPI Sector but it is most definitely in the 10s of thousands. When the deadline hits, this will have a large impact on the contract market and it is a key question to see where individuals will then go and work next.  

The Taylor Review from last year looked to ensure a balance between workers’ rights and those who are self-employed. There will be more legislation from the government as it seeks to gain from the growing contractor or gig economy and protect its tax income. The public sector has seen this already and it is only time before the private sector sees the same changes. 

The bottom line is that firms need a blend of resource. That is what we do here and offer to our customers. We practice what we preach. 

I hope the government and other bodies take a pragmatic approach and don’t stifle innovation by regulation, particularly for small to medium (SME) businesses. 

Stick or Twist? I think you will probably need to do both.