IR35 – What Does it Mean for the Private Sector?
WHAT IS IR35?
The Intermediaries Legislation known as IR35 has been around since 2000. Its aim, when introduced, was to remove the tax advantages of providing services via a Limited Company for individuals who are not truly in business on their own account. The rules sought to identify 'disguised employees'; those whose working practices had the features of traditional employees rather than those working on their own account.
The application of IR35 in practice has, according to successive governments, failed to crackdown on this so called 'disguised employment' and they consider many Limited Company owners continue to operate illegitimately outside the rules. In response to this avoidance new 'off-payroll' rules were implemented in the public sector in April 2017.
For the first time, instead of the contractor being responsible for determining their IR35 status, the obligation was moved to the engager of the contractor i.e. the end client. Where the client deemed a contractor to be 'inside' IR35 then the client or the employment intermediary (through which the contractor is engaged if there is one) must apply statutory deductions i.e. tax and NIC from the contractor’s pay and also pay Employer’s NIC as if the contractor were a traditional employee of the client.
ROLLING OUT TO THE PRIVATE SECTOR
If all stays as it is, clients will need to prepare to determine the IR35 status for each of their existing contractors and to have a plan in place for implementation of any changes before April 2020. It is worth stating clearly, however, that there is no need to panic or to rush this activity.
Visit jonlee.co.uk/ir35 to find out more.
Growing your Workforce - the ‘Temp to Perm’ Route
Employers face a conundrum; how do we balance the need to hire the requisite skill-sets vital for business growth against the risks associated with a permanent hire?
There is a simple way that can help employers to test the water and build confidence in their hiring decisions. Temp to perm is a route that businesses should consider, particularly when the vacant role is critical to business success.
There are a number of benefits to exploring temp to perm when employing new employees;
TIME SAVED: The right recruitment partner will have access to a broad network of relevant candidates, many of these can be available at short notice and are happy to work on a temp to perm basis
TRY BEFORE YOU BUY: This route will enable you to see what a candidate can offer to the business prior to you making any long-term commitment. You will also be able to see how they fit with your business culture
COMMITMENT: The knowledge of there being a temp to perm opportunity is a good way of ensuring that a candidate will treat the period as a probation period and can often ensure greater commitment to the role
REFERENCING: Candidates working on a temporary or contract basis will often come armed with references, speeding the turnaround of the recruitment process and removing the delay involved in obtaining references from previous employers
AVOIDING A RECRUITMENT FREEZE: Flexible resource is a great way to overcome short term business restrictions. If there is a hold on hiring permanent staff, it can give both HR and Line Managers the opportunity to benefit from the skills they need on a temporary basis ensuring business delivery is not compromised, whilst introducing and training a new team member before offering a permanent contract, once the freeze is lifted
Industry 4.0: Removing the White Noise
Whenever I speak to business leaders, they have most certainly heard of this revolution, however, the raft of articles that describe the endless possibilities and warnings can soon become white noise and hype. It sounds too good to be true.
And here is why. When viewed holistically, there are many facets to Industry 4.0; the topic is vast and incorporates a wide mix of technologies. Because of this, its meaning can drastically differ from business to business and person to person, indeed, even within the same organisation.
WHERE TO START?
Every business leader wants to make better products, improve productivity and gain a competitive advantage. But which disruptive technologies are relevant? How can I make hypothetical reality? What capital, time and resources will I need to see a return?
IT'S GOOD TO TALK
The first port of call would be to openly discuss it – speak to your customers and supply chain, trade associations, peers at events. Understand how it is affecting them.
Many manufacturers have continuously improved their processes over time; adopting advanced technology as well as utilising tried and tested methods of manufacture, often combined with lean and 6 sigma techniques. Industry 4.0 is the next improvement process.
Trade associations such as Make UK, BFFF, SMMT, ADS, MIA, Rail Alliance are all aware of Industry 4.0 and each have their own bank of initiatives, data and expertise. They are there to represent you and your industry so get in touch with your account manager and find out what resources they have.
FUTURE OF BRITISH MANUFACTURING INITIATIVE
The Future of British Manufacturing Initiative (FoBMI) is a fantastic tool, free and available to all. All too often we attend events or read articles that ‘worship the problem’ rather than actually help! I would encourage any business to take the online readiness assessment tool which takes 15-20 minutes to complete.
Is the Skills Shortage holding back UK Composites?
There is a chronic skills shortage across all sectors of engineering and manufacturing in the UK – and that certainly applies to composites. Simply put, there are not enough people in the marketplace with the requisite skills. It’s a direct result of a lack of investment in STEM education and vocational training over many years.
Some forward-thinking companies have already independently invested in or established links with innovation centres to access training – but it is unlikely this will be enough to keep pace with the needs of industry.
While essential for the long-term, manufacturers can ill-afford to wait for these skills to become available - they need ready-made skills in their businesses today to meet the short-term demands the market is placing on them.
As an industry we must think creatively: Could the Composites Technician Trailblazer Apprenticeship be used to upskill existing or new employees? How can people with transferable skills be encouraged to engage with new technologies?
There are signs that things are improving. I am seeing more high-quality candidates coming into the marketplace. We also come across candidates who are typically mid-career and are looking for a new and interesting challenge. However, looking forward, the skills shortage dilemma will continue to prevent progress.
INFLUENCING SCHOOL-LEAVERS TO TAKE UP COMPOSITES AND ENGINEERING APPRENTICESHIPS
Schools have an important role to play in encouraging young people to take up composites and engineering apprenticeships. There are still schools where pupils make birdboxes or nightlights when technology means they could be creating something far more advanced and engaging.
Building links with schools and introducing teachers and students to both general engineering and the opportunities available within niche areas such as composites is critical.
JONATHAN LEE RECRUITMENT TO EXHIBIT AT ADVANCED ENGINEERING 2018
Manufacturing and engineering employment specialist, Jonathan Lee Recruitment, will be attending Advanced Engineering 2018 at the NEC, Birmingham, to showcase its sector expertise and talk to visitors about challenges including 4IR, skills shortage and Brexit.
Celebrating its 10th year, Advanced Engineering is one of the UK’s largest annual gatherings of OEMs and engineering supply chain professionals and showcases technologies and solutions across co-located show zones.
For Jonathan Lee Recruitment, it is a great chance to showcase its 40 years of expertise within advanced engineering and manufacturing recruitment.
David Woakes, Group Business Development Manager at Jonathan Lee Recruitment, commented: “We’re very aware of the challenges facing manufacturers today, specifically the need to embrace digital initiatives and new technology and the impact this has on their people. We’re delighted to be working with businesses navigating these changes and preparing themselves, and their employees, for the future.”
Jonathan Lee Recruitment will be exhibiting on stand M48 with expert consultants from a range of industry sectors including aerospace, automotive and FMCG.
For more information on Jonathan Lee visit their website: jonlee.co.uk
Skilled Workers in Aerospace Manufacturing, Production and MRO Outstripping Demand
The industry has proved to be resilient despite Brexit uncertainty with production hitting record levels in response to growing aircraft demand. This is creating a substantial need for skilled workers in manufacturing and production, with demand outstripping the availability of suitable skills.
We are seeing high recruitment demand in the maintenance, repair and overhaul (MRO) market. As the global in-service fleets steadily grow in response to higher demand from middle class emerging economies, the MRO market that supports in-service aircraft is also expanding and that is naturally where we are also seeing businesses looking to strengthen their teams.
The recent increase in universities offering targeted aerospace courses has helped at entry level, but there are still some areas that are lacking. For example, individuals can only specialise in quality and inspection by working their way up from the shop floor – a more direct route via a degree qualification would be beneficial.
The main difficulty over the last 10 to 15 years has been to find engineers with the requisite hand skills. Employers are making the effort to close the gap with the re-introduction of more apprenticeship schemes, encouraged by the structure the Apprenticeship Levy has provided.
Savvy employers are utilising Apprenticeship Levy funds to not only train school leavers, but to also upskill their existing workforce. If levy contributions are re-invested in a strategic way, it can be a perfect opportunity to upskill employees in relevant apprenticeships; from non-destructive engineering technician (level 3), aerospace software development engineer and aerospace engineer (degree), through to senior management (masters).
The Apprenticeship Levy should be seen as an opportunity to help fill the void left by any skill shortages within a specific business.
Talking Internet of Things (IoT) with Autodesk
We were absolutely delighted to welcome Asif Moghal, Senior Industry Manager from Autodesk, to our offices recently to speak to our team about the Future of British Manufacturing Initiative (FoBMI), the Internet of Things (IoT) and how the 4th industrial revolution (4IR) is affecting manufacturers.
We were introduced to “Dave”, the typical owner/manager of an average SME manufacturing business based in the UK. In what was a very engaging presentation, Asif discussed how “Dave” can gain an advantage in the new digitalised world.
As Asif explains: “Many organisations have initiatives in place to reduce costs, improve productivity, optimise processes, or simply innovate. But even with these in train, the speed at which new technologies enter the market is increasingly alarming for many.
“The future belongs to companies that quickly figure out how to collaborate and personalise their products and services, flexibly design and manufacture them and ultimately step into the world of connected services. We want to enable British designers and manufacturers by enabling truly agile capabilities that helps them do this continuously and profitably.”
Asif Moghal is one of three guest speakers at the Future of British Manufacturing presentation taking place on the Jonathan Lee Recruitment stand (M48) at Advanced Engineering exhibition 2018.
Visitors are invited to stand M48 at 11.00 am on the opening day of the exhibition (Wednesday 31st October), where Asif Moghal, Senior Industry Manager from Autodesk, Chris Greenough, Commercial Director from Salop Design & Engineering and Dr Megan Rohayne, Memberships Development Manager at EEF will discuss the FoBM initiative, progression of 4IR and the changes required for future skills.
For more information speak to David Woakes 01384 446149 or email him or visit Eventbrite.
Jonathan Lee Recruitment is a lead partner of the Future of British Manufacturing Initiative (FoBMI).
To learn more about FoBMI see jonlee.co.uk/FoBMI.