Four tips to make the most of the contract market
The contract market has experienced a continuous increase in popularity in recent years, with higher demand for contractors to work within the UK economy.
Recruitment as a whole has been growing at a fast pace, and contract work has played a key role in this. The UK Recruitment industry saw a total revenue of £32.2 billion in 2017, and the vast majority of this was achieved through temporary and contract recruitment. It contributed 87.6% of that figure (£28.2 billion), compared to the 12.4% (£4 billion) generated through permanent placements.
Now, more than ever before, is time to assess your contribution to the contract branch of recruitment, to make sure you are at the top of your game. To help you, we’ve taken a look at four key areas you need to know and skills to master to lead the industry:
- Finding clients
- Finding candidates
- Paying them
- Sectors that are booming
CV stripping to find contract roles
CV stripping is a great way to source business opportunities. It can be perceived as an aggressive way of getting new clients, however, when done correctly, it shows initiative and means finding new customers, not the other way round.
The information to pull from your contractors’ CVs is:
- The companies they have worked at previously
- The person within that company who ran the project
Gathering this information means you have a list of companies who recruit contractors.
What to do:
- Before you get them on the phone, do you research. If you call up knowing what the company does, what kind of people they want to employ and so on, you’ll come across far better than if you go in blind.
- Introduce yourself, your business and why you’re calling. But remember, don’t make this a pushy sales pitch. They have shown no interest in working with you and they may not even have roles to fill at the moment. This introduction should feel like an informal chat that will hopefully become something more.
For more advice on finding clients, read this blog.
Without a pool of talented contractors to hand, you won’t get far in contract recruitment. So it’s vital to ensure you are always maintaining a varied, dynamic selection of candidates on your books.
Here are some of the things you need to do with your talent pool:
- Build up a book that covers all the industries you work with
- Have a variety of contractors available for junior, midweight and senior positions
- Know the key skills and experience for all of your contractors, so you can instantly make suggestions when speaking to clients about options
- Know which of your candidates are available for work, as well as when
Working with umbrellas vs. Ltd companies
There’s more to contract recruitment than just placing a candidate with a client. Due to their self-employed nature, contractors can be eligible to work in a few different ways, including as a limited company or under an umbrella company. Being able to accommodate both kinds of contractors increases the number of talented candidates you have at your fingertips.
Here’s how they differentiate and how you should work with each.
Limited company: Contracting under a limited company means the candidate is responsible for establishing their own company and for submitting their taxes directly to HMRC.
Things to note when working with them:
- If the end client wants to use different terms and conditions, check that they will not hold you accountable if there are any issues with the candidate you supply.
- Make sure your agency has the correct insurance in place to cover yourselves, should any issues arise.
- In the same light, ensure that the candidate has insurance to cover themselves if there are any problems with the end client. This covers your back as well.
- Make sure you have all the necessary paperwork available for the candidates on your books, should HMRC want to see it – you can learn more about this here.
Umbrella: Working for an umbrella company means the candidate is essentially an employee of that company. They submit their timesheets to the umbrella who will invoice the end client for the work done. The candidate is then paid as a PAYE employee, with the company’s fees deducted from their pay.
Things to note when working with them:
- Make sure the umbrella company is compliant across the board, and ask to see proof that they have a qualified, registered accountant.
- Get copies of the umbrella company’s Certificate of Incorporation, VAT certificate and Insurance certificates.
- Verify that the umbrella company has a policy regarding Agency Workers Regulations (AWR), so that you know your candidates will be paid the correct amount.
- Try to work with a list of approved umbrella companies, or do you research on the company your candidate wants to work with to ensure they’re compliant.
- Ensure all parties sign the contract before the work starts.
Best sectors to be working in
To get ahead of your competition, and attract more business, you need to keep an eye on the UK economy at all times. Though most recruitment agencies work with a particular few sectors, it is always worth keeping up-to-date with industry trends and looking for new opportunities to extend your business offering
These are just a few tips on how to take advantage of the contract market, however, if you follow these steps, you’ll be moving into contracting with your best foot forward. You can always check out our other blogs, as we regularly share news, advice and guidance on contract recruitment.