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Preparing for change: The unforeseen impact of IR35 reform

Preparing for change: The unforeseen impact of IR35 reform
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Jessica Mullinger

Jessica Mullinger

Head of Interim Management and Operations

Trepidation, confusion and anger is what I heard a couple of weeks ago when I took a call from the MD of an interim recruitment business, who was starting to consider the potential impacts of the planned IR35 changes in the private sector. Although the world of interim management can be volatile, it is rare that an adjustment in regulation ever turns out to be a real game-changer but in the public sector, two years ago, IR35 did just that.

Of course we all predicted before the changes came into play that costs would rise, we would lose candidates and recruiting processes would become more complex; these issues have gone from prophecy to fact over the last two years. However, at Solace, a major change which we did not foresee has been the shift in size and shape of the candidate pool. Now that many interim roles are deemed to be in scope of IR35, the unspoken rules around career interims versus non-career interims (those candidates who are in-between permanent jobs) have all but disappeared.

The seismic impact of the IR35 changes have been such that, rightly or wrongly, we have seen the candidate pool grow from a select and distinct group of experienced career interims to an expansive pool of flexible candidates, who move fluidly between interim, permanent and fixed term roles. This fact in itself has fundamentally changed the interim service we offer at Solace and impacts daily on our clients and candidates.

At Solace we have clients who will specifically request a career interim, in certain situations. For example the HR Manager at a South East council states that “career interims are imperative because of the depth of experience that they can bring to the role having faced and learnt from similar challenges at numerous different authorities”. This said, in some circumstances the right candidate could come directly from a permanent role and hit the ground running in the same way. A high profile Chief Executive in London, for example has moved between permanent and interim roles over the last couple of years, very successfully. The Head of HR at the council where she was interim Chief Executive maintains that she was the “right fit for the role” despite being interviewed alongside a number of very experienced career interims.

Our task at Solace is no longer building a pool of registered and vetted career interims, who can be submitted for roles at the drop of a hat. Now, the potential candidate pool is so wide that numerous methods of candidate acquisition are used for every role and the shortlists are no longer short! This means that the level of screening is far more robust for each individual role and the due diligence that we were once able to carry out over a period of weeks is now completed within days or even hours, for those candidates not known to us.

So, how can all parties prosper under these changing market conditions?

First and foremost research and understand IR35. The impacts are too far-reaching to avoid getting into the detail. Secondly, don’t underestimate the power of effective and transparent communication. Clients; give considered and detailed briefs…the more information a provider has about a role, the more effectively they will be able to narrow down a shortlist of candidates from fifteen to five. And candidates; be honest! Tell us about all the opportunities you are considering, tell us what your drivers are and enable us to run a controlled and effective recruitment process. Allow us more time to talk to you in detail about your skills and experience. Finally, ensure you collect references from every client you work with so that due diligence does not hold up the appointment process.

Providers should ensure resourcing teams are highly skilled and able to flex to changing market conditions. It is critical that recruiters can cut through terminology and very quickly identify the true skills and expertise of their candidate pool. Recruiters need to have an unequivocal knowledge of their market place and how it interacts with other markets. We also need to have a solid grasp on due diligence processes and the procedures in place to carry out checks quickly and efficiently. Finally solid recruitment skills are essential to enable absolute control over a recruitment process, where the candidates involved will more than likely have divergent motivations and drivers and may well be considering a number of very different opportunities at the same time.

In reality the private sector has got a bumpy road ahead as they come to terms with the IR35 changes, but with the right skills in place, dedication to learning the new regulations inside out and an open-minded and agile view of what the interim world can offer under the new regulations, they will survive and live to tell the tale, as we have in the public sector.


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