Following the 2018 Autumn Statement, the need for HR to gain visibility and control of the non-permanent workforce was brought sharply into focus with the long-awaited announcement that private-sector contractors will potentially face higher taxation and NI bills. The legislation, known as IR35 is designed to hit those contractors deemed by HMRC to be employees.
83% of UK companies don’t have procedures in place for contractors or gig workers (Deloitte, 2018).
As insurance goes through an extended period of transformational change the new regulations will impact both smaller specialist insurers and generalist providers. Many have discovered they do not have the skills required in-house or through the talent scarce permanent candidate market. The ever expanding ‘gig economy’ has helped insurers tap into a multitude of skills, whilst maintaining a flexible workforce beyond the mature contractor markets of IT and Business Transformation.
Often the non-permanent workforce is controlled by the business, meaning HR are on the back foot. Furthermore, if the spend through one supplier is not of a certain level or does not form part of a Master Services Agreement (MSA) then it is unlikely to fall within the processes governed by Procurement.
The typical starting point is for HR to conduct an audit, but getting access to multiple data-sets within an organisation can be a convoluted task. HR will need to collaborate with Finance, Legal, Procurement and their Line Managers to get a true picture of the size of the non-permanent workforce.
Whilst embarking on this journey of discovery it’s not uncommon to unearth gaps in screening and compliance, non-compliant suppliers, discrepancies between days worked and invoice value processed. The scope of what you initially set out to do has become even more complex.
46% of HR professionals say that 1 in 5 of their employees will be non-perm by 2020 (PwC, 2016).
One solution to help navigate this is to appoint a Managed Service Programme (MSP) provider, which enable HR to manage the non-permanent workforce as a programme and mitigate many of the risks.