Contractors: IR35 & general discussion

[anonymous-user]

Dog Star said:

It's not because permanent staff "aren't good enough"

How do you know if you've never even worked there? Bizarre post.

[Blown2CV]

some companies do in fact use contractors because their people aren't good enough... but that definitely isn't very common.

[Countdown]

Blown2CV said:

some companies do in fact use contractors because their people aren't good enough... but that definitely isn't very common.

Agreed - if perm staff were rubbish why wouldn't we we'd get rid of them and get other perm staff?

Why do people assume it's so hard to get rid of permanent staff?

[Countdown]

Gazzab said:

I ran the area and was deeply involved. The perms in this instance weren’t good enough. It was less about the tech and more about the knowledge and capability.

I suppose the same question applies - if you ran the area and they were rubbish then why didn't you bin them?

[Blown2CV]

Countdown said:

Blown2CV said:

some companies do in fact use contractors because their people aren't good enough... but that definitely isn't very common.

Agreed - if perm staff were rubbish why wouldn't we we'd get rid of them and get other perm staff?

Why do people assume it's so hard to get rid of permanent staff?

i think in the scenarios where this happens it mostly isn't that they know their perms are st but can't get rid... it's more that they don't have anyone on their side who knows what good or bad looks like because either they overly outsourced in the past, or they just don't know what they don't know.

[Carl_Manchester]

let’s not forget how we got here.

management laziness, fraud and cronyism were rampant in city contracting for years.

guys on £1,600 a day at the top end for years paying kickbacks and taking kickbacks (10% of your daily to secure a role) down to grass roots blokes working the same role for peanuts, being paid offshore for 16 years only to be found when HR did a desk audit.

[Olivera]

Carl_Manchester said:

let’s not forget how we got here.

management laziness, fraud and cronyism were rampant in city contracting for years.

guys on £1,600 a day at the top end for years paying kickbacks and taking kickbacks (10% of your daily to secure a role) down to grass roots blokes working the same role for peanuts, being paid offshore for 16 years only to be found when HR did a desk audit.

Any evidence to back up those assertions?

[Carl_Manchester]

Direct experience through 20 years in the City. Fraud control was one of the driving reasons why recruitment was centralised into single vendor desks and then those were used as a cartel to start beating the independents up.

[Gazzab]

Countdown said:

Gazzab said:

I ran the area and was deeply involved. The perms in this instance weren’t good enough. It was less about the tech and more about the knowledge and capability.

I suppose the same question applies - if you ran the area and they were rubbish then why didn't you bin them?

Seriously?

[TTmonkey]

Having been a contractor for a number of years, and now a perm in charge of over two hundred perm and contractors I can clearly say there is no indicator that contractors are better than perms or vice versa.

This old ‘if you were any good you’d be your own boss’ twaddle spouted by some loud mouth contractors is exactly that. Most of the best people I’ve dealt with are perms, and most of the ‘all mouth no trousers’ types have been contractors, good at only pulling the wool over team leaders and service mangers eyes.

I’ve known some great contractors. But probably more committed and talented perms, on balance. The contractors will rarely do more than they are paid for, and you can’t assume for a minute that they will give that extra when needed without a prior understanding or agreement.

It galls next having to give a perm a paltry recognition award for something the contractor sat next to him probably billed £600 for doing the same or less.

I’ve been in my current role 7 years and can think of only one perm Ive had to get rid of. Yes far easier to get rid of a contractor that’s oversold their skills. Most of my current contractors are worth their day rate, but you have to build that part of the team by being proactive with the ones that don’t meet the day rate.

[Clockwork Cupcake]

This discussion seems to be going the same way as the Cyclists vs Motorists ones.

You're going to get some bad and some good on both sides, and it's pretty boring reading about them bhing about each other.

They are just two different ways of working (contract and perm, I mean) and neither are better than the other, or make you better than the other.

So how about we all give it a rest on this, eh?

[markyb_lcy]

Clockwork Cupcake said:

So how about we all give it a rest on this, eh?

+1, It’s terribly boring isn’t it.

Some people are st, some people are good, most people are somewhere in between. Some are contractors, some are permies.

I think that covers it.

[mikef]

TTmonkey said:

...

Interesting post

I contracted for over 10 years, some of at interim VP level (real tech VP, not at a bank), and am now in a full-time senior role heading toward retirement

One thing I will say both from a contractor perspective and as a hiring manager is that with one main exception, using IT contractors is usually just a sign of weak, clueless management. The key exception is when you are billing the freelancer out for more than they are costing you

In the past two years, as a blue-chip employer in the City, we have gone from over half contractor and external vendor staff (maybe a thousand in total) to under 10% vendor contingent workers for flexibility, and maybe a handful of freelance IT contractors

Our technical subject matter experts, many of whom were hired as grads and extensively trained up are certainly no less competent and productive than the contractors were, certainly academically and intellectually stronger, and a lot more pleasant to have around

We will still have PSCs working in areas like technical editors and translators who bill us by the page or word, but removed PSCs in IT in anticipation of the April 2020 IR35 date and haven’t gone back - no regrets there, it’s worked out well

I really can’t see IT contracting returning to anything like what it was, personally

Edited by mikef on Monday 7th December 21:21

[TTmonkey]

mikef said:

TTmonkey said:

...[/quote)
Interesting post

I contracted for over 10 years, some of at interim VP level (real tech VP, not at a bank), and am now in a full-time senior role heading toward retirement

One thing I will say both from a contractor perspective and as a hiring manager is that with one main exception, using IT contractors is usually just a sign of weak, clueless management. The key exception is when you are billing the freelancer out for more than they are costing you

In the past two years, as a blue-chip employer in the City, we have gone from over half contractor and external vendor staff (maybe a thousand in total) to under 10% vendor contingent workers for flexibility, and maybe a handful of freelance IT contractors

Our technical subject matter experts, many of whom were hired as grads and extensively trained up are certainly no less competent and productive than the contractors were, certainly academically and intellectually stronger, and a lot more pleasant to have around

We will still have PSCs working in areas like technical editors and translators who bill us by the page or word, but removed PSCs in IT in anticipation of the April 2020 IR35 date and haven’t gone back - no regrets there, it’s worked out well

I really can’t see IT contracting returning to anything like what it was, personally

We were really late doing the ir35 determinations earlier this year. We ran them the day the change went trough parliament, and hadn’t published them to our contractors. It helped us because there was a major internal contract renewal running at the same time. This year it won’t matter. 99% of them will be inside.

The days are numbered. In future we will have perms and some ‘high end consultants’.
All the mediocre contractors will be given options.

[Countdown]

Gazzab said:

Countdown said:

Gazzab said:

I ran the area and was deeply involved. The perms in this instance weren’t good enough. It was less about the tech and more about the knowledge and capability.

I suppose the same question applies - if you ran the area and they were rubbish then why didn't you bin them?

Seriously?

Yes, it was a serious question. If they weren't up to the job then why not get rid? Blown2CV gave the answer below which made sense but perhaps something else applied in your case.

Blown2CV said:

i think in the scenarios where this happens it mostly isn't that they know their perms are st but can't get rid... it's more that they don't have anyone on their side who knows what good or bad looks like because either they overly outsourced in the past, or they just don't know what they don't know.

[wombleh]

Deep Thought said:

Its also a risk v reward model for them. It costs something like £20,000 for them to do a full investigation and they will want many times that back in recovered revenue and they have limited resources. Each team is targeted on how much tax revenue they recover per quarter IIRC.

I remember speaking to one of the IR35 specialists about this, maybe around 2008. Their view at the time was that there wasn’t any consideration of potential “take” on the HMRC side and they’d had investigations against clients who had done week long contracts. Could well have matured since then.

I also remember the vast majority of contractors at the time hadn’t even heard of IR35, how times change....

[Clockwork Cupcake]

wombleh said:

I also remember the vast majority of contractors at the time hadn’t even heard of IR35, how times change....

I find that really surprising, given that it came into force in 1999 and has been hanging over us like the Sword of Damocles ever since.

I know a few contractors who have always just operated as inside IR35 "for a quiet life" but I've never met one who was ignorant of it, even back then.

I'm not calling you out or anything, I'm just saying that I am really surprised that any would be ignorant of it, let alone a "vast majority".

[Olivera]

Like many here I have worked with both excellent permies and contractors. However due to the nature of contracting (hitting the ground running at a client), I would say that contractors are on average more experienced, and probably older too.

I think we also need to take a step back and ask: for employees, is the (relative) demise of contracting good for them? I think the answer is no.

Contracting used to provide a career avenue for experienced individuals, trading off increased risk against higher remuneration. With that avenue closed employers have an even more captive labour market, likely exacerbating the trend over the last few decades of pitiful levels of wage inflation.

[wombleh]

Clockwork Cupcake said:

I find that really surprising, given that it came into force in 1999 and has been hanging over us like the Sword of Damocles ever since.

I know a few contractors who have always just operated as inside IR35 "for a quiet life" but I've never met one who was ignorant of it, even back then.

I'm not calling you out or anything, I'm just saying that I am really surprised that any would be ignorant of it, let alone a "vast majority".

You're right, perhaps better way of saying it was that IR35 wasn't really a topic that came up in discussion much. Thinking about it, there were a few conversations along the lines of "doesn't bother me I just change contracts every 2 years" and similar so people did know it existed but whether they understood it was up for debate! My client at the time had hundreds of contractors, in the bunch I knew there was only two of us getting professional IR35 advice and having confirmation of arrangement letters with the client.

[Bluedot]

wombleh said:

Clockwork Cupcake said:

I find that really surprising, given that it came into force in 1999 and has been hanging over us like the Sword of Damocles ever since.

I know a few contractors who have always just operated as inside IR35 "for a quiet life" but I've never met one who was ignorant of it, even back then.

I'm not calling you out or anything, I'm just saying that I am really surprised that any would be ignorant of it, let alone a "vast majority".

You're right, perhaps better way of saying it was that IR35 wasn't really a topic that came up in discussion much. Thinking about it, there were a few conversations along the lines of "doesn't bother me I just change contracts every 2 years" and similar so people did know it existed but whether they understood it was up for debate! My client at the time had hundreds of contractors, in the bunch I knew there was only two of us getting professional IR35 advice and having confirmation of arrangement letters with the client.

I'd have to agree with that as well. When HMRC changed tack and started proceedings to target the clients, the amount of contractors I knew who only had the vaguest understanding or awareness of IR35 was quite startling.