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Everyone who was contracting is doomed – IR35

And so it begins… the recruitment industry is entering the final chapter, preparing for the last quarter before the annihilation of the contractor market as we know it.  

The sinister shadow creeps ever closer – having already had its fill in the public sector, the IR35 monster now turns its insatiable appetite to private industry…  

You heard it here first – everyone who was contracting is doomed! 

 

 

It was good while it lasted 

In the near future, when IR35 has finally laid waste to the once-thriving contract recruitment scene, those recruiters who were lucky enough to enjoy the ‘golden era’ of contingent staffing before the regulation will gather newcomers around and tell them tales of what is used to be like. 

  • Contractors on rolling contracts stretching far off into the distance – sometimes ticking over for years at a stretch, racking up margin with every week and hour that passed. 
  • Managers or business units who were forbidden to add headcount would simply build out teams of ‘contractors’, ducking the corporate legalese and exploiting a giant and (for recruiters) exceptionally lucrative loophole.  
  • Specialists hired for ‘interim change’ projects would gradually be absorbed into the fabric of their employers, having their contracts renewed as a matter of course as they drifted from one assignment to the next.  

 

But all good things must come to an end, and the contractor party looks set to wind down leaving nothing but memories and rumours of a once-great industry.

 

How did we get here?

What led to the collapse of such a thriving sector? 

Contract gigs have kept thousands of workers in contented employment across a vast range of commercial sectors – it seems unfair and counter-intuitive that a solitary piece of regulation should rip the livelihoods from so many, while simultaneously cutting off employers from a vital flow of talent and skills.  

And (most importantly!) contract recruitment has been a booming sector for recruiters, building out teams of market specialists and seeing a surge in the number of new agencies launched – what a tragedy that all this is now set to come crashing down too…

 

 

Is it really that bad?

Well… there is, of course, an outside chance that the likely impact of IR35 has been exaggerated in some quarters. 

A tiny bit. 

OK, a lot. 

Is the recruitment industry facing some changes ahead? Without doubt. 

Is contracting dead as we know it? Almost certainly not.  

While IR35 undoubtedly calls for some adjustment from both contract recruitment specialists and employers of contract workers, it’s by no means ‘an end’ to contracting nor is it intended by the government to shut the door on the flexibility, employer benefits and significant contribution to the economy that professional contractors provide. 

Instead, IR35 is an attempt to level the playing field, ensuring that those who are exploiting a long-overlooked tax loop are required to pay their share. 

For many employers, contractors and recruiters, it is most likely to represent a shift in the way contract engagements are managed – ensuring that scope, contract wording and other key components are aligned with IR35 guidelines.  

As we near the upcoming change, it’s increasingly accepted that IR35 isn’t going to bring the sky crashing down on our heads.

However, it does require recruiters and contract agencies to be informed, and to be confident that their systems and processes are compliant with IR35 requirements.  

If you’re keen to better understand the agency requirements to keep up with the change, and to understand how technology can help support compliance, chat with your CRM provider or get in touch with the Voyager team for more information.  

 

 


Voyager Infinity and Voyager Mid-Office are software solutions that make Recruiter’s lives easier. Voyager Infinity is a CRM used be thousands of Recruiters globally to source, nurture and maintain the relationships of tomorrow placements, and Mid-Office manages the entire Pay and Bill process.