- Directory of Members
Written by FCSA Business Partner, Remus Rewards
When it comes to attracting and maintaining new and existing employees, it can become a challenge to retain let alone attract high quality contractors. This challenge does not get easier with time and continues to provide difficulties throughout the UK’s recruitment industry. Come April 2020 this may become even more difficult, due to IR35. The IR35 framework is designed to crack down on so-called “disguised employment”, which is where a company engages contractors who work in the same way as employees, but who pay less tax. To comply with the new law, IR35 is designed to ensure that contractors working via their limited companies deemed to be doing the same work of an employee pays broadly the same tax.
Instead of worrying about IR35, an Umbrella company removes the burden of IR35. By operating as an employee of an Umbrella Company, the IR35 rules do not apply to you! This means you can work as a contractor without the worry of any additional tax bills and penalties.
With more contractors now or preparing to be employed under Umbrella status, engagement is key. There are a number of simple ways that can help make a difference to a contractor’s life that has nothing to do with how much they’re paid. By providing simple rewards to contractors, it encourages them to continue working, knowing there are unlimited rewards available for them. Offering contractors something useful that makes a difference to them, makes them feel valued and more likely to stay with you for their next contract. Providing equal rewards for both employees and contractors shows a company values to all who works for them. The added advantage is that rewards is a great way to build brand awareness.
Although, by providing an extra incentive for contractors to stay working for you, rewards may not always be what is required. 40% of contractors said they wanted a job role that enabled them to have an impact on the organisation. Though contractors are invested in their salary as much, if not more than permanent employees, contractors still rate their company culture and career growth highly. Being able to provide career growth allows contractors to prioritise their learning of new skills and working with the latest technology.
In a recent study, 64 percent (64%) of contractors said that access to skills was more important than something like cost savings. A key benefit of hiring contractors for many organisations is being able to adapt quickly to changing markets realities.
Importance of engagement
It is important that all staff are engaged at work. Engagement is an important variable for the majority of organisations. This ensures organisations deliver increased performance and to gain a competitive advantage. It is seen that engaged employees and contractors make more effort, learn more, and are more creative. Good engagement leads to good customer satisfaction, personnel retention, productivity and profitability. Communication is key. Keeping a positive outlook on a contractor’s future career opportunities encourages excitement about their potential career growth and drive results in the future.
To summarise, a typical time scale a contractor needs to pass before they become profitable is between 8 – 12 weeks. Therefore, the importance of contractor benefits is to create a stickiness and depth to your offerings which in turn will increase your profit and give you an edge against your competitors.
When contractors are looking for the best deal, it doesn’t always mean the best price, with a fast growth of new Umbrella companies currently coming to market, it is more important than ever to have an engagement program that offers a wide range of benefits in all aspects of their lives from wellbeing to good old fashion discounts.