D-day looms for interim consultants facing IR35

6th November 2019

By John Wakeford

With just five months until the IR35 changes come in, D-day is looming for interim consultants.

From April 2020 medium and large sized private sector firms (over 50 employees) will bear the responsibility for determining the IR35 status of all their off-payroll workers.

While the vast majority of companies who employ interim executives have not yet announced how they intend to respond to the new regime, a number have already indicated they are taking a safety first approach.

In the heavily regulated financial services sector, Barclays, HSBC and Lloyds have all said they will in future only engage contractors on their payroll on a PAYE basis. Meanwhile Tesco Bank has also said that, at least for now, all limited company contractors will be declared inside IR35 after March 2020, until it agrees its long-term policy.

Should other corporates follow their lead in the weeks and months ahead and take a blanket approach to end all off-payroll contracts, the impact on the executive interim market will be seismic.

Interims would be forced to decide whether to accept the significant loss in income which being employed on PAYE terms, paying income tax and National Insurance and being taxed on expenses as an employee, would mean.

Obvious alternatives include seeking non-IR35 contracts, applying for permanent executive roles, working abroad, taking on NED roles or retiring.

The potential impact on businesses which rely on interim consultants could also be significant. By ending all off-payroll contracts they could lose access to the best talent, as highly experienced interim executives choose to only work with firms who will engage them outside of IR35 or instead leave the market altogether.

Another major concern is that with just a few months to go until the tax changes, so many companies and the interim consultants which serve them have still not decided the way forward.

A recently published report by specialist law firm Brookson Legal ‘Avoiding an IR35 talent drain’ includes a survey of more than 500 contractors which found:

  • Nearly a quarter said they don’t fully understand the changes
  • 83 per cent had still not had a conversation with their current client about IR35
  • Only 22 per cent believe their client will make a correct decision
  • 37 per cent would never consider moving to staff status
  • 59 per cent would consider moving to another client if they were assessed as being inside IR35
  • More than half thought the changes would discourage people from starting as contractors in future.

In an earlier survey this year of more than 500 firms who hire contractors, also commissioned by Brookson Legal, nearly three in five directors said they would take a blanket approach to managing IR35 as they did not have the resources to assess individual contractors. This has certainly been borne out by the actions of some of the banks in recent weeks.

So what should interim consultants do?

Take action now. Interim consultants need to contact their client(s) to find out what they intend to do about IR35.

If your client(s) inform you they are ending all off-payroll contracts you need to establish if this will include existing commissions.

Get in touch with us to discuss your future career plans. We can identify other opportunities including interim contracts outside of IR35, permanent executive roles and moving into NED.

But don’t just wait for April…the clock is ticking.

John Wakeford is MD of HW Interim. Contact him at johnw@hwglobalpartner.com or on +44 (0) 113 243 2004.

Exploitation of big data the answer for supermarket giants battling low cost competitors

11th June 2019

Dave McNulty talks to Stuart Richards

The pace of change in our industry never seems to abate. The rise and rise of the German retailers is seemingly inexorable, with their ultra-efficient assortments and aligned, low-cost supply chains allowing them to deliver a value proposition that shoppers need and want.

It’s an approach that has alerted shoppers to the inefficiencies of the more traditional sales technique of value through promotions.

Let’s be honest, deep cut price promotions or hi-low strategies were once the drug of the retailer, shopper and manufacturer alike. But this deep deal culture was at the root cause of huge supply chain inefficiency with forecasting, inventory management and service all increasingly complex to master for everyone in the chain.

If this inefficiency ended in empty shelves or high wastage the end result could be a disillusioned and disenfranchised shopper, something that can have a damaging effect on loyalty.

So, is the answer for the big retailers to replicate that Every Day Low Prices (EDLP) approach to win shoppers back?

Should the ‘Big 4’ tighten assortments to drive efficiency, move to an EDLP or medium-low approach and work with fewer suppliers in a more collaborative way, jettisoning those who cannot bring themselves to align?

As unpalatable as it may be, the simple answer is yes or maybe. But it’s not all that black and white and the truth lies a little deeper.

Inevitably, retailers will only want to work with those who align to their strategic agenda – even the big brand powerhouses recognise that. It’s how you align that will determine your success in navigating through the retail landscape. This begins with a re-evaluation of the landscape.

The shopper of today is a digital savvy shopper, one who is perfectly happy to shift to online in the pursuit of convenience, experience and value. The emergence of Amazon as the UK’s fifth biggest retailer may be uncomfortable for many retailers, but it’s indicative of a significant shift in shoppers’ mindsets.

Subscription models such as harrys.com or Dollar Shave Club in male grooming or Hello Fresh in meal solutions have cut out the middlemen and gone straight to their consumer. Another hammer blow to big retailers? Far from it, but it must be a concern.

So how does big retail adapt and how do manufacturers align and help? I believe the answer lies in data and the availability of it through internet shopping and loyalty/CRM programme tools.

Artificial Intelligence will be transformational for our industry. When you’re on any digital platform you’re generating hugely valuable data which the most intelligent machines will interpret and then customise their content to you.

So, working with supermarkets to utilise this data and customise your offers to individual shoppers is powerful. Accurately identifying your target consumer or shopper and presenting them with a relevant deal enhances not only their experience but it also drives tremendous efficiencies in areas such as supply chain management.

Working collaboratively with retailers in this way isn’t of course the only solution; aligning on food sourcing and sustainability, navigating legislative headwinds like the sugar levy or HFSS regulation, and capitalising on wellness trends are all valid areas of collaboration.

But big data lies behind so many facets of today’s retail landscape and its exploitation will allow manufacturers and retailers alike to work together in a unique way to drive value and loyalty for all.

Dave McNulty is a highly experienced MD and commercial director in grocery, wholesale and cash and carry, working in senior roles for global brands including Kraft and Coca Cola. Stuart Richards is a Principal Consultant in the Global Consumer Practice at HW Global Talent Partner. Contact him at stuartr@hwglobalpartner.com or +44 (0) 161 249 5170 or +44 (0) 7787 254 600.

HW Global acquires leading digital recruitment specialist

9th May 2019

HW Global Talent Partner has today announced it has joined forces with UK digital recruitment agency Zebra People.

HW Global has taken a controlling interest in the privately-owned London-based firm, launched in 2001 by Nick Cochrane.

Zebra People specialises in hiring digital product teams, with typical roles including user experience (UX) and product design, full stack developers, product managers and delivery/project managers. The firm recruits for roles up to director level – both permanent and contract.

HW Global currently operates on an exclusive and retained basis in the £120K+ search market, also placing interims on daily rates from £700 to £2,000.

The deal is the first in a series of planned acquisitions designed to enable the fast growing global executive search and interim firm to offer its clients an end-to-end talent solution in key functional areas of high growth, transformation and demand.

Other potential acquisition targets include recruitment agencies specialising in finance, HR, technology and professional interim at the tier below executive level, and HW Global would welcome approaches from like-minded recruiters and investors.

The Zebra People acquisition will enable HW Global to offer a comprehensive digital talent service to its clients, with HW appointing senior digital leaders and the Zebra People team building the critical capability that sits underneath.

Both HW Global and Zebra People will continue to trade under their existing brands, with a new holding company HWJ Holdings acting as the acquisition vehicle. The deal creates a £16m turnover business with c. 50 staff in London, Leeds and Manchester. HW Global’s CEO Spencer Jinks and Chairman Paul Spetch will sit on the Zebra People board.

Other benefits of the deal will include efficiencies driven through shared services, mainly around accountancy, legal and audit.

Spencer Jinks said: “HW Global and Zebra People complement each other in so many ways and once we were introduced to Nick and his team there was an instant meeting of minds, with the huge mutual benefit of our combined expertise obvious.

“Zebra People has a fantastic reputation for building diverse high calibre digital and UX teams, whilst sharing a desire to provide exceptional service to both clients and candidates alike. The partnership provides a fantastic platform to share expertise, whilst accelerating careers and skill set and attracting new talent to underpin our ambitious growth plans.”

Zebra People’s clients include Monzo, The Guardian, Which?, Eurostar, Just Eat, Aviva, Barclays, Lloyds and Global Radio alongside government agencies such as the Ministry of Justice, the Department of Work & Pensions and the Department for Education – as well as start-ups.

Director Nick Cochrane said: “Joining forces with HW Global will open up a wide range of opportunities for us both in the UK and internationally, while offering our clients the executive search service we had previously been unable to provide.

“The two businesses are undoubtedly an excellent cultural fit with a lot in common in terms of ways of working, ambition, innovation and how we value and invest in long term relationships with our clients and candidates. We are looking forward to an exciting future.”

Philip Ellis, of Optima Corporate Finance, provided corporate finance advice to HW Global, and Jonathan Asquez of Gordons LLP’s Leeds office provided legal advice. Financial due diligence was carried out by Simon Kite and tax advice by Mike Hodges, both of Saffery Champness, Manchester. Andy Francey, of Freeths, Leeds, provided legal advice to Zebra People.