Tag Archive | "agencies"

Time to change the world of recruitment methinks


You have to laugh, you know. I never cease to be amazed at the number of posts I see about contractors claiming all sorts of problems with, variously, notice periods (don’t need them, as I’ve said before), IR35-safe contracts (fine as long as they represent reality), the AWR (don’t start me on that one again) and the infamous opt out from the Agency Regulations (opt out if you can but it makes little real difference). Plus, of course, the running complaint about the agency’s percentage of the contractor’s rate: except, of course, as ony fule kno they don’t get the percentage, the contractor does.

However there is a common theme to these various complaints. The agency.

We have to be fair to the poor agents themselves though. Increasingly they are run by accountants targeting sales figures and maximising margin. Little details like serving both sides in the contract have zero relevance to their business model. The individual agents are given achievement targets and so have no time for the niceties if they want to pay the mortgage. And of course it is much more cost effective to employ minimally experienced drones to handle the phones and use software to do the pattern matching between CV and job description.

All of which is fine if you’re dealing with a commodity market like general development, operations and service management roles. But it’s a serious problem for all sides if you are a little more senior, or have niche skills in some area or another. Or even if, like many, you aren’t a specialist in any given field, just a good, solid all-rounder who can make a success of any contract they’re given.

In effect you start from scratch every time you need a new contract. No matter how good you are, you still have to get through the auto-pilot box-ticking recruitment business we have these days. The one that says the agent gets a new role then stands there waving a piece of paper in the air to see who might be interested: usually several hundred, often hopelessly under qualified people on average. The signal to noise ratio in recruitment is actually appalling. How much cleaner if he had the resource to hand when the role comes in.

So how do we change the paradigm (see, I can do business speak as well…). The answer is surprisingly obvious.

The contractor pays the agent, not the client. Shock, horror…

Seriously, it would work. I have many skills but selling isn’t one of them, nor is cold-calling to find work (actually that’s just cowardice, but the result is the same). So why not outsource that part of the business to someone who does it for a living? The agent goes to the client with a zero margin deal. The contract would have to be B2B and, legally, you would have to be opted out of the Agency Regulations, both of which would appear to be good ideas. You know, solid in business indicators, no IR35, no AWR, no secret upper contracts…

There would be no hint of you being anyone’s employee either, since you’re at the top of the contract, not the bottom.

The agent would have to know who you are, what you can do, what you are worth and what your history is. He would be able to sell you actively and be incentivised to find you repeat business, since that’s where his margin comes from. He could specialise in given areas and build up a stable of people with the relevant skills, or he could be the one to fill the awkward jobs from his knowledge of his customers.

Best of all, you set the gross and the agent gets the percentage.

So what’s not to like? If you’re big enough and strong enough to build and justify a working reputation, and be able to be sold into an open market, why not go for it? I’d happily pay for that level of access and support, which has to be better than fighting your way to the top of some disinterested minion’s in tray to get noticed.

All we want is a couple of good agencies with the courage to bite the bullet and disregard the way they’ve always done it.

Ah. That might be a problem. Anyone know any brave, risk-taking agency FDs…?

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: SmiAl – Sad by Al aka pintofeggs

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Figures on IR35 DO exist. So who’s kidding who?


As well as being technically proficient, independently minded and a bit intolerant of rigid work patterns, we’re also a tolerant bunch, us contractors. You kind of get used to having to dig out the truth from the often intentional obfuscation you get from the agencies, the client, the civil service and a host of other places. And you get to recognise some universal truths.

“Cyclists can ride safely on footpaths”. Yeah right…

“All contractors are very well paid”. Well we aren’t exactly running on empty, but we are usually pretty good at what we do, and command a decent rate accordingly. But the average rate for IT contractors as a whole is around £40 a hour these days,which is near as damn it the same net take home as a permanent employee on £40,000 a year; good but not exceptional.

“We require you to opt out of the Agency Regulations”. No you don’t. For one thing it’s nothing to do with you, Mr Agent. It’s not my problem if you’ve agreed a contract with the client that is incompatible with the requirements of an Opted-In contract for me. Since 95% of all Opt Outs aren’t legally correct, from what I’ve seen, why not work on the assumption that everyone is opted in? Ah, of course, then you wouldn’t be able to claim that the workers you supply are your own dedicated resources, would you?

“Opting In is highly beneficial”. Well, is it? The two key gains are guaranteed payment and a time limit on handcuff clauses. The former may have a superficial appeal, but if the agency’s not got any money they aren’t going to pay you anyway. The latter looks nice, but there will be the upper contract between agency and client that almost certainly stops them taking you on for at least as long as the period in your own contract. So where’s the handcuff limitation protection then?

“Retain 85% of your gross with our compliant solution”. Yeah, right. You do until the scheme gets legislated out of existence, the scheme owners do a runner or you discover the scheme doesn’t actually work in the first place. Then again Hector has recently given up trying to shut down some of these schemes because they can’t safely separate out those who should genuinely use them, like pension funds, and those who are taking advantage. Although that won’t stop them trying.

“We need to retain IR35”. Ah, now, hang on a minute. That was Osborne’s position in the last budget, when for a while we thought we had proven that IR35 was not only damaging and spiteful, it wasn’t actually earning any money for HMRC. The case was slightly hampered by the repeated assertion that there are no figures specifically covering IR35 within the ledgers of the Treasury. So we kind of accepted Osborne’s assertion that he needed it to dissuade Friday-to-Monday converts. (This despite one of the more obvious cases being Mr Hartnett, ex permanent Head of HMRC, now freelance Acting Head of HMRC. Didn’t even have to empty his waste bin). And the implicit assertion that since he wasn’t keeping any measure that wasn’t cost-effective, then IR35 was paying its way.

Then, all of a sudden, PCG gets a very interesting answer to an FIO request. It seems those figures do exist. What’s more, they are pretty damning: total case prosecuted over the last five years? Three hundred and twenty two. That’s slightly over one a week. Total revenue gained as a result? Five million, four hundred and forty two thousand, two hundred and ninety nine pounds. A shade over a million a year. Or just under seventeen thousand per case, assuming all were successful, which they almost certainly weren’t. Doesn’t exactly go very far against the one trillion government shortfall, does it…

Ok, so this is interesting. We have been told more than once that no figures on IR35 were being kept. You can even find that in Hansard. Now, suddenly, they have been. Most odd. So who’s kidding who, Mr Osborne?

And who in the previous administration was responsible for the earlier statements. I think we need to be told.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Urban Art by freeflyer09

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One day, sanity will prevail. But I suspect I’ll have retired by then.


An interesting idea was floated this week on one of the websites I haunt. Someone was getting just a little exasperated at the identity proving process we all suffer these days, and rather than drive 50 miles to an agency’s offices to show them his passport was wondering if having a Skype video conference with the agent while holding his passport would suffice.

General response was along the lines of nice idea, but these are agencies we’re dealing with so probably not. It’s not that we have any objections to proving we are who we say we are; it is to everyone’s benefit, after all. But the whole thing is getting just a little surreal.

Start with the passport thing. What everyone fails to remember is that a passport is only proof of identity if you are the one holding it. Copies, be they full colour images, redacted black and white scans, video image, even with you in the frame – none of these are proof of anything beyond your skills with a digital camera. You have to be there, holding it, at which point the other guy can take a copy of the photo page – nothing else just that page – for their own records.

And there’s another issue. The more peripatetic contractors – like me, for instance – go through this farce several times a year. Just how safe are all these copies of a Crown documents, I wonder? And how many of them are deleted once they are no longer needed?

And given the quality of most of my communications from agencies, just how accurate are the supporting records anyway? We will never know…

The real irritation, though, is that the whole exercise is totally unnecessary. And, as usual, we have to look to those bastions of professionalism and awareness, the agencies and the Human Remains Resources teams.

Because HR are usually in the loop for hiring contractors, they only think of them as pseudo-employees. OK, that’s an old argument that bores even me, but it’s still true. Therefore the master contract the agency has with the end client’s HR team is framed in terms of employment law. This, among other things, lays fearful penalties on clients who don’t ID check their employees.

Agencies, being at the higher end of the risk averseness scale, take great care not to offend. Hence they go to great lengths to ensure everyone they touch is checked. Except I am not an employee of anyone, I am an independent supplier. I’ve checked the people I send out to work for me and am more than willing to assert that I know who they are and that they are allowed to be here. And take any penalties you care to throw at me if I’m wrong. And since I’m not the agency’s employee – much as they like to pretend we are – and certainly not the client’s, there is no legal obligation to ID check me all over again.

All that has to happen is for agencies to have two contracts with their clients: one for employees, one for freelancers. Do that and not only do a lot of contractual arguments go away – along with 90% of the threat of IR35 and the AWR of course – but they save themselves hundreds of pointless man hours a year which, you might think, would appeal to the bean counters who run most agencies these days.

But far too simple a solution will never catch on. Especially if nobody triers to sell it.

And just to close, how about this for idiocy. One guy was asked for his NI number as well as his passport and “other documentary proof of address” to get a building pass. NI numbers aren’t a proof of anything, as the Home Office is at pains to point out. For one thing, while the numbers are unique they may have been given to, or used by, more than one person. So not really a lot of good to anyone as a proof of anything.

One day, sanity will prevail. I suspect I’ll have retired by then.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited

Image: The Usual Suspects by Dylan Parker

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Recruiters – the only people who seem not to understand the value of uniqueness


How would you feel about a business where you didn’t really understand what the product is and were selling to someone who also doesn’t understand what it is but whose understanding was different to yours? But nevertheless the overall business has an annual turnover close to £30 billion.

Because that’s the Recruitment industry these days.

I was in a meeting recently where an account manager from one of the local agencies gave a talk on how the agency interacts with the contractor and all the various add on services they provide. Made for several PowerPoint slides of things ranging from de-risking payments to providing help and guidance And very interesting it was too, until another speaker, this time a contractor, stood up and gave their view of the same relationship..

Guess what? They didn’t really match.

To be fair to the agency, they do find the business and they do factor the money and they will, if pressed, negotiate rates and the like with the end client, all of which is pretty valuable if you want a quiet life. Where it goes wrong is how they represent us to the client.

Every agency tries to tell the client that they have this pool of highly expert staff ready to fulfil any role the client wants filling. And what is more their sophisticated search facilities and in-house databases match candidates to roles with unfailing accuracy. So explain why, if that’s what they do, why is my Inbox getting three or four emails a day from agencies offering me a whole series of roles, almost without exception ones that bear little or no relationship to my actual skills or location. Could it be that what they do and what they tell people they do aren’t exactly fully aligned?

And, of course, this same doublethink has permeated the client HR departments. Because they get contractors from the “recruitment” agencies and those contractors are presented as individuals, rather than as service providers, they see us as a slightly weird form of employee. OK, we may have different email addresses to the permie staff and we might miss out on things like car parking rights and canteen access, but ultimately we are still seen as just another worker.

So why is this important? As long as we get paid, does it really matter?

Well yes it does, actually. In fact it’s getting increasingly important. The career contactor has to demonstrate more and more to HMG that we are free-standing businesses; small ones, admittedly, and ones who probably won’t ever grow too much, but still businesses with all that implies. Sadly, that argument gets cut off at the knees by the way the market treats us as a lightly modified employee with an inflated salary.

Of course, deflecting this juggernaut from its path is not going to be easy; in fact, it may not even be possible. After all, £30 billion a year is something with a lot of momentum. But that doesn’t mean we shouldn’t try. The freelancing model we have in the UK is certainly unique in Europe, and pretty much unique in the rest of the world, with only Australia and the USA coming close to the level of operational freedom we enjoy.

So it’s a real shame that the very people we have to deal with to get our skills to work are the only people who seem not to understand the value of that uniqueness. I think it’s time they found out.

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited

Image: HAIER kids by boni_face

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Accept this one thing and the AWD ceases to have any meaning


I started a new contract this week, having had rather too long a break from real work. And not a moment too soon, to be honest. Apart from having an income stream again, it’s a lot more fun talking to intelligent people about real problems instead of chatting to the dog about where we should go walkies today. Not that he ever answers me, beyond a slightly lopsided grin and a frantic tail wagging session.

Which is rather how I feel about certain agencies over the last week or so.

Perhaps the stress of having to get up in the morning and go somewhere is getting to me, but I am getting increasingly irritated by the flood of emails from assorted agencies offering me work that is nothing to do with my CV. They obviously have my CV, or some version of it, since they get the name and email address right almost every time (apparently I am a Mr Wells according to one recent email). But hey, does that CV imply that I really can’t wait to go be a permanent change manager in Geneva for twelve months? Or sit on a help desk in Warrington on £20 an hour? (Gosh. Be still my beating heart…). Still, just like the dog, you have to pretend they understand what you’re telling them or run screaming in despair.

And that is why I am seriously worried about the upcoming Agency Workers Regulations.

PCG and others seem fairly confident that the regulations, which are aimed at ensuring temporary workers get the same protections as permanent staff after a short while, won’t apply to genuine contractors working through their own Limited Companies. While that may well be the case, I have a horrible feeling that the agencies won’t quite grasp the point. An industry that routinely confuses a senior Service Delivery Manager and sometime Head of IT with a Helpdesk worker in Warrington is really going to struggle with the concept that not everyone they place in a job wants to be protected.

Which means that rather than move the Agency/Contractor contract more towards a genuine business-to-business one, which would establish the true nature of the relationship with the end client, they will be telling everyone that you need to have even more draconian clauses in the contracts to reinforce that point that the contractor is not an employee of theirs, or the agencies, or anyone else. Honest. Cross my heart…

Which really is the wrong way to go.

After all, the more you try and nail the myth that someone is not an employee, the more HMRC is going to think you have something to hide. All those interlocking clauses about no rights to be implied and mutuality is not assured must be hiding something or why have them?

And anyway, I am employed by someone, in all meaningful senses; there’s this company that I work through that supplies all I need in the way of income and sick pay and holidays and pensions funding and the rest in return for me hauling myself over to Cardiff or wherever and doing my thing. OK, so I own it, but it is a separate legal “person” and operates totally in accordance with a whole pile of relevant statutes. Accept that it exists, and has a real purpose, and all this Agency Worker nonsense, not to mention IR35 itself, suddenly ceases to have any meaning.

If only someone could tell the agencies that…

About the author: Alan Watts

Alan has worked in IT for most of the last 35 years, and first went freelance in 1996. He has been a PCG member from its start and has been spreading the message that freelancing is a professional career choice for many years. Alan also runs Malvolio’s Blog, a personal but highly informative take on the life of the modern freelance.

Alan Watts, Principal Consultant, LPW Computer Services

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited

Image: No entry for big-haired cleaning ladies by lorentey

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