Laura Handley, Change & Innovation Lead, RedWizard, the webinar sponsor, appeared along with Colin Yoshioka Smith, CW Operation Manager, Keltbray, and Harriet Kirkpatrick Founder/Director, TRIA Recruitment.
Together, they explained and explored the current benefits of this method of securing talent in a highly-competitive talent market. In this webinar, they answer two additional questions.
What are the panelists’ views on how to navigate the minefield of potential pay discrepancies? Many contingent workers are expecting a certain hourly rate or day rate. This is not always the same as the rate that salaried members of the team get. Parity regulations and rules are important, but many companies still pay higher rates to contractors, which can have a negative impact on relationships with permanent employees. What are your thoughts on finding a balance?
Laura : It’s a common concern. We recommend that you educate your permanent staff on why contractors get paid more. They have other costs that may not be obvious – they will have to pay corporation tax and income tax for their salary if they incorporate. They’ll also have travel and equipment costs, as well as training costs in order to keep their skills up-to date and competitive on the market. They bring in specialist skills which are needed only for a brief period of time or to work on short notice. They can add value by upskilling/educating the internal team.
Using Statements of Work in place of time/materials constructions can be helpful with this problem as there is no comparison. However, the company must remember that SOWs are not a way to avoid IR35. This can be an excellent way to ensure that the focus is on business outcomes and benefits.
It is important to determine the type of worker engagement needed before engaging any workers. This will depend on the tasks that need to be completed, the skills required, the timeframe, and the budget.
Contractors who are employed for a long period of time can cause problems. They should have a contract because they are integral to the company.
Harriet It is fair to expect contingent workers to be paid more as they will not (shouldn’t have) the same job security, benefits and training that permanent team members receive. Their higher rate compensates that. To ensure the right balance, you need to first consider when you will bring in contractors (are they hired for a particular project, to provide skills that are not available in the permanent workforce or to meet a high demand? ); how you engage them (are you treating them differently from permanent employees?) and how you collaborate the two worker populations (for instance, by allowing permanent team members to receive upskilling from contingent workers). When you have contractors with long-term contracts performing the exact same job as their permanent counterparts, problems can occur. In my experience, if you have a genuine need for a contingent employee it is possible to avoid friction between the permanent and contingent workforce.
Total Talent Management: Is it suitable for all businesses? Do I have the impression that it only pays off for businesses over a certain scale?
Laura : Total talent is for any business size. It is smart to put in place the total talent foundations while your business is still establishing. This will give you an advantage over other businesses as you grow. When considering how to accomplish your goals, it’s important to be able to find the talent that has the right skills at the right moment.
It is important to note that the data component is crucial. If you have a small company, it will be easier for you to set up a solid foundation in terms of data standardisation, data governance, and data management across your permanent and temporary workforce. Total Talent is a model where you can use a workforce to meet the needs of your business.
RedWizard is an example of a micro-company with five employees who work on global corporate projects. We have a core team of consultants who we supplement with associate consultants. These are specialists that can be called on for a short period of time. Being able to adjust our workforce according to our business needs can be very cost effective. It is important to carefully consider each engagement, balancing our immediate needs against long-term requirements. It is sometimes easier to hire a temporary employee and save money on long-term costs and recruitment. However, we still need to have a core group of employees in order to run the business.
Harriet : For small businesses, I think it is still wise to use a holistic approach to bringing in the right skills. In practice, it is possible that the strategy indicates a much lower engagement of contingent workers compared to a larger company. However, it is still beneficial to consider all options in order for you secure the right skills.
