In recent years, areas of key skills shortages in building services have led to increasing reliance on contract employees. In the consulting market, M&E design engineer and CAD and Revit technician roles are frequently filled by contract professionals, as are project manager and project engineer roles in the contractor market.
However, the introduction of updated IR35 legislation for the public sector in April 2017 impacted personal service company (PSC) interims, and shifted the responsibility for determining whether a PSC employee is inside or outside of scope of IR35 legislation onto the hiring organisation, including liability for tax and national insurance contributions.
Lack of clarity and a short window between the legislation’s finalisation and its implementation date resulted in many employers implementing in scope determinations for all workers, rather than applying the new rules on a case-by-case basis.
Changes to IR35 are expected to be rolled-out for the private sector, so building services employers must prepare now, especially those SMEs without internal legal resources.
Planning is crucial, but awareness is still lacking
Despite the difficulties experienced in the public sector, a recent Hays survey revealed that 57% of private sector employers are unsure if their organisation has begun to prepare for the expected legislation changes.
Of those who have started preparing, less than half (43%) have carried out an audit of their PSC workforce, and nearly a fifth (17%) plan to apply a blanket in scope determination for all PSC workers.
How should you prepare
This lack of preparation runs the risk of repeating the challenges faced by the public sector, such as impacts on costs and the ability to attract highly-skilled contract professionals.
So what can building services employers in the private sector do to prepare?
1. Work closely with a recruitment expert
Audit your interim workforce to ascertain your level of risk. A recruitment expert who has supported the public sector through the original implementation date can help determine how IR35 will affect your organisation, and develop a solution if required. They will also be able to help you communicate any changes to workforce effectively.
2. Continue to hire contractors where needed
Updates to IR35 need not change the way your organisation utilises interim workers as long as you take the time sooner rather than later to prepare your strategy. This will ensure your organisation is able to access and compete for temporary building services skills you need to undertake change.
3. Have a long-term plan
Think about how you will assess and arrive at a determination for each PSC assignment, and maintain control and visibility over how contractors are on-boarded and utilised going forward. If you rely heavily on contingent workers, then a Managed Service Programme (MSP) may be more beneficial, where a recruiting partner fully manages the recruitment process of temporary workers.