A few weeks back I did a blog about The Top 10 Woes for Contractors - http://www.xperianrecruitment.com/top10woes/, so I thought it would be good to explore the same subject from the client perspective. Here are the top woes I have heard from clients when exploring the IT contractor world.
Contractors are expensive – Because contractors are paid differently to permanent employees, on face value the cost can appear to be quite high. If you factor in the “on costs” of employing someone permanently, such as Employers NI, holiday pay, sick pay, employee benefits and training & development; the gap becomes reduced.
The charge rates for contractors can be confusing – Agencies will charge the client either a mark-up or a margin rate on top of the contractors agreed daily rate. This can be confusing for some clients but our handy guide will help cut through the confusion - http://www.xperianrecruitment.com/payments-rates/
Contractors only work for short periods – This is true for some contractors, they only want to be in one place for 6 months. We’ve had contractors who have converted to permanent employees, so it’s not always the case. If you let your agency know the long term picture, they can work with you to find the continuity you need.
Contractors are not loyal – This may appear to be the case, however some of the contractors we have placed have been with the same organisation for long periods of time adding real value to the team. A lot comes down to why you need a contractor and how you integrate the contractors into the permanent team, but you need to be aware of IR35 rules.
IR35? Contracts can be renewed, but you need to be aware of IR35. Each contact needs to have a schedule of work detailing what the contractor will be doing during the contract period. If you keep re-using the same schedule of work you might fall foul of IR35 rules, so check our Xpert guide - http://www.xperianrecruitment.com/ir35-compliance/
I’ve hear that contractors can “substitute” someone else in the role is this true? Remember you are not employing a person, you are paying for a set piece of work or a project/programme. The contractor invoices via a limited company, so it’s the company you are employing not the person. So yes, a contractor can get someone else to replace them in case of absence to ensure the work gets done. If your contract with the contractor or the agency does not have the substitution clause in it, again you can fall foul of IR35 rules.
Contractors take their knowledge with them – Again, this is true, so good documentation of their work is often the key. It depends why you need a contractor. For short term projects this is often the best way to get the right resources when you need them. It’s got to be better than employing someone for 6 months and then making them redundant.
Contractors are always moaning that the agency is taking money off them – This should not be the case if you are using a reputable agency. The charge to the client includes the contractors daily rate, no charge comes off the contractor’s rate, not even an admin fee. The fee should be a reasonable margin or mark-up somewhere between 15 – 20%
Our contractors have to chase for payment – This should never be the case, provided the contractor submits timesheets and invoices at the right times as agreed in their contract. Contractors are not paid weekly or monthly like PAYE employees are they are paid much like any invoice for goods or service.
Xperian Recruitment have years of experience sourcing and managing contractors. We work with our clients and our contractors to ensure that everyone gets a fair deal. We do not levy large margins/mark-up’s. We work within clients budgets and ensure that the contractor receives the right rate for the contract. We also work hard to ensure that our contractors are paid correctly and on time.
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