Tag Archive | "awd"

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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AWR – instead of clarity we get muddle and greyness

Regular readers – both of them – will have learned by now that if someone ever sets up an Appreciation Society for the benefit of Saint Vince of Cable I am unlikely to be in the queue for tickets. His tenure as Business Secretary has been littered with decisions that seem almost deliberately intended to make the contractor’s life even more difficult than it already is. I doubt he does it on purpose, so we have to conclude that he simply doesn’t think things through properly. Or perhaps he doesn’t pay attention to the outcomes. Well, hey, he is a politician, I suppose.

Consider the Agency Workers Regulations, which are looming ever larger on the horizon. The intent of the original EU-derived ruling was to ensure that low level temporary workers – people who aren’t really in the best place to fight their own corner – are protected from being denied basic rights that are taken for granted by permanent employees; little things like holidays and sick leave and access to the canteen. It has to be said, that is an entirely reasonable and even laudable aim.

As is the way of such legislation, the EU sets the objective and leaves it to the member countries to enact as best they can. So guess what happens when St Vince’s department get hold of it?

Firstly there is a consultation period. They produce a straw man proposal and invite interested parties to comment on it, note ambiguities and errors and suggest any obvious improvements. They consider the responses, redraft the straw man into a final document and that become the legislation.

Except for one minor point. They kind of missed the ever-so-slightly critical point about the scope of the legislation.

Like I said, it’s meant to protect vulnerable workers. Now I am many things but I don’t for one minute consider myself to be vulnerable to being downtrodden. Apart from She Who Must Be Obeyed of course, but I volunteered for that one. So why the hell am I potentially in the scope of the AWR?

It seems that DBERR have been gold-plating the requirement. Specifically, rather than draft something aimed at “agency workers” they allowed it to cover any independent worker, including freelance contractors who, as a breed, are probably the least vulnerable workforce in the country.

And what makes me angry (and No 10, who tried to see if it could be redrafted at the eleventh hour) was that very point was made, clearly and explicitly, in the original consultation. They were told the scope is wrong, it’s not meant to apply to this group but only to that one. But when the final draft hits the presses the only exemption is the somewhat mealy-mouthed exclusion of “those genuinely in business” which, as we know all too well, is not a clearly defined anything. They may as well have said “Those who are either taller, or shorter, than six feet. Without shoes”.

So apart from now facing the risk that our contracts are going to get even more tangled as HR and the agencies try to get around the legislation, we lost the chance for a clear chance to define exactly what is meant as a freelance contractor, as opposed to an agency worker. Given the average itinerant fruit picker is unlikely to own his own company, there is at least one simple and very clear separator. This would have greatly aided various other arguments such as who is caught by IR35. But it is not to be; instead of clarity we get muddle and greyness. A bit like St Vince, in fact. Which is something of a pity.

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: Back Yard On New Year’s Day 2011 by Kerry Niemann

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What all contractors should know about the agency workers directive

Many contractors have already heard about the proposed Agency Workers Directive (AWD), but not everyone truly understands how it will affect the contracting and recruitment markets in the UK.

Whlst attempting to establish the EU economy as the best in the world, the AWD’s objective is to create the most appropriate framework of employing temporary workers in the EU and to ensure that these individuals are not discriminated against.

Of all the countries in the EU, only the UK has such a well established recruitment marketplace, which is why approximately 1/3 of all EU agency workers are based here. In Italy, employment agencies were considered illegal until only very recently.

With consultations on-going until 18th October 2009, the Government is now studying the possible impact of the AWD on temporary agency work in the UK. The EU is expected to adopt the proposed directive by September next year, to be implemented into UK Law in two years time.

Impact on UK Contractors

So what does all this mean for UK freelance contractors? Well, there are several proposals currently in consideration, most of which have been included to provide temporary workers with the same (or at least similar) rights and conditions to permanent workers. Recruiters are being asked to scrap Temp-to-perm transfer fees and end clients will need to inform agency workers of available permanent positions.

According to the proposals, member states may refuse the equal treatment of temporary workers but only in the following circumstances:

* temps are paid between assignments (this is rare in UK);
* they are covered by collective agreements (this is also very rare);
* the assignment is for less than 6 weeks (the Government is pushing for a 12-month limit whilst some MEPs believe that there should be no limit at all)

The DTI predicts total costs of between £80 and £194 million to recruitment agencies and the cost for clients between £239 and £387 million. Costs to payroll and umbrella companies have not been estimated. According to some, the DTI’s Regulatory Impact Assessment lacks any objective data on temporary work in the UK and the EU – its quoted figures are therefore questionable.

Since the AWD requires equal pay and benefits for temps, it is believed that temporary work on the whole in the UK could decrease considerably. The UK government contests that the AWD must not include workers pay since Article 137 of the EC Treaty clearly states that, ‘the provisions of this article shall not apply to pay’. The inclusion of pay would mean that the payroll company (umbrella) or recruitment agency must obtain detailed information on a client’s pay standards in order to ensure that temps are not paid less.


The proposed AWD, once adopted, could greatly impact the freelance recruitment industry in the UK and contractors should prepare for the possible consequences. We recommend that you write to your MP and MEP to explain and give examples of how much this proposed directive could cost you.

© 2009 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Danger extreme by Dano

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