Written by Kris Simpson, Country Manager, Cool Company

The contract workforce offered great accessibility for businesses seeking to outsource their workload or hire in new talent. The contract marketplace was a pool of ever-growing contract workers who were available to hire with hugely reduced administration processes when it came to bringing them onboard. 

The changes to IR35 legislation have left many businesses, who relied on freelance and contractor talent to grow, in the lurch. Hiring contract workers – a necessary and beneficial previous choice – now means wrangling with legislation that includes contracts, worker rights, and taxes.  

Many of these businesses have neither the resources nor the expertise to handle this transition. So, what’s the solution?

 

What Options Are There for Navigating IR35?

Once a business has grown to a level where they are affected by the new IR35 legislation, they will need to assess the three main options they have for navigating these changes. 

Firstly, consider relying on in-house talent by redirecting outsourced work to current employees. This may require taking on more permanent staff if there are the funds to do so. 

The problem with this option is that it can increase the strain on the current workforce, as well as potentially stifling the growth of business.  

Secondly, a business can decide to invest in making sure that the HR, recruiting, and accounting departments understand the implications of the new legislation and how this impacts their current work and decisions. 

Thirdly, the final option is to find an established and compliant umbrella company to work alongside, that takes care of all the administration and legislative considerations.

 

How Can Umbrella Company Solutions Help Businesses with more than 50 employees?

Put simply, umbrella companies are the intermediary between businesses and contractors. Businesses that want to work with contractors but remain IR35-compliant, can work with those contractors that work through umbrella company solutions.

Once the right contractor is sourced, the business pays the umbrella company the contractor’s agreed fees. The umbrella company pays these out to the contractor, in a fully compliant way.

Umbrella companies can be helpful to growth businesses using multiple contractors at any one time as they expressly handle the administration side; they deal with paying the right tax, observing contractors’ rights – sickness and potential holidays, for example –and ensuring that the legislation is adhered to. 

Having the umbrella company handle the red-tape benefits both the businesses and contractors, as they don’t need to be concerned with the administrative tasks.

 

How to Attract and Retain Top Contractor Talent 

When it comes to attracting and retaining top contractor talent, there are some key things to keep in mind, particularly as competition for this talent is continuing to grow: 

  • Provide clearly detailed briefs with realistic deadlines
  • Provide fair and prompt payment (this is where an umbrella company can offer key support)
  • Ensure professional, courteous, and polite interactions with clear channels of communication
  • Show appreciation for their work
  • Understand that the market is competitive and offer a better opportunity or project than your competitors

The changes to IR35 legislation has hit both expanding businesses and contractors hard. The challenges faced with navigating these new changes are solvable with the right support and processes behind you.