The inevitability of change

Julia Kermode

Change is coming, like it or not, and you will be surprised that I’m not referring to the recent vote to leave the EU.

Instead I am talking about the never-ending onslaught of new regulations which continue to impact our sector. The more that come, the more resilient we become and the better equipped to prepare our businesses. We are now more able to manage change, and we continue to prosper.

In recent years we have seen many changes, culminating in the most recent restrictions to tax relief on travel and subsistence expenses. This was set to have a severe impact on temporary workers, with many doomsayers predicting the end of umbrella firms, contractors demanding increases in their rates, end-clients unable to meet any increase, and a shortage of skills, to name just a few. But, I am pleased to say that we have yet to see these consequences take effect. From talking to recruiters and FCSA members, the impact has been much less severe than anticipated. So far, the reality has witnessed recruiters and service providers working in true partnership, explaining the changes to the workforce (and end-clients if appropriate), and individuals have understood and accepted that the changes are beyond our collective control.

And yes, I have gone on record with some of the same predictions with the exception of the demise of umbrella firms – because, contrary to reputation, T&S was not the only reason for their existence. Some people who have been in the sector for a number of years took a pragmatic attitude, and told me that it won’t take long for the sector to be agile and regenerate, and that the impact will not be as severe as we anticipated.

And now we face yet more significant changes and the inevitability that hirers will be responsible for determining the IR35 status for off-payroll workers in the public sector. It is infuriating that hirers’ new responsibility will immediately be delegated to agencies if they are in the supply chain. This new change is set (again) to fundamentally shift how our sector operates, particularly if, as universally anticipated, it is rolled out into the private sector. So given recent experience with T&S, surely all the doomsayers should be ignored, their views taken with a pinch of salt? No, absolutely not – and quite the opposite in fact! Without strong action in responding to the consultation, then our collective voices will not be heard, and the doomsayers will be right. Each of us has a responsibility to contribute to the debate, and ensure that we do our utmost for our sector, the flexible workforce, and ultimately the UK economy. Collective unity will win out.

So I urge you:

–       don’t allow the doomsayers to be right
–       don’t assume that our sector can survive
–       don’t assume we will always manage to regenerate
–       be proactive, grab the opportunity to have your say and directly affect the changes that are coming.

I genuinely believe that doing nothing is not an option; we must continue to get our message across to Government so that progress can be made. We all know that the flexible workforce is critical to our economy:

–       enabling businesses to be agile
–       giving firms the ability to accept/pursue new contracts
–       enabling firms to scale up (and down) according to demand
–       enabling new projects to be undertaken and businesses to grow
–       giving access to niche specialist skills
–       giving firms the ability to diversify their business.

The modern flexible workforce is so much more than simply providing cover for absences. In fact, the businesses that take a holistic approach to engaging the flexible workforce, integral to their strategy in achieving their objectives, benefit the most.

And let’s not forget that more people than ever are choosing to work in this way, in preference to permanent employment. So there is push and pull from both sides. The business arguments, the workforce arguments, the economic arguments stack up – they can’t all be wrong! For all these reasons, the flexible workforce is far too important to be risked by policy changes which may have dramatic unintended consequences. And I believe it is particularly important, now more than ever, to support the flexible workforce, as they in turn support the UK economy through the uncertainty that Brexit brings. So make sure you engage in the process and do everything that you can to secure our long-term future. The inevitability of change means that doing nothing is not a viable option.

Julia Kermode is Chief Executive of the Freelancer and Contractor Services Association (FCSA), the largest independent trade association for contractor accountants and umbrella firms.