How to Ensure you Retain Good Contractors

The nature of contracting is that contractors tend to come and go, but there may be times when you want to hold onto a good contractor for an extended period, or you want to ensure you can use their service again in the future. At the very least, you want to retain good contractors stay until the project is complete. Good contractors will often have other options available, and therefore, retaining the talent within your organisation would be beneficial. It can be challenging to keep everyone happy if you manage multiple contractors, but it is vital to do so. These are some steps you can take to help ensure you retain good contractors.

Clear Expectations

Before the contractor starts their assignment, your expectations of them should be clear, so there is no room for confusion. What is the project outcome, and what do you expect weekly or monthly? For instance, if an IT contractor is working on developing a program, ensure they have deadlines set and an overall goal. The clearer you can be with your expectations, the better for all.

Ensure Responsiveness

If a contractor needs help or asks a question, ensure you are responsive to them and that the lines of communication are always open. Don’t keep vital information from them that disrupts the outcomes they are trying to achieve. Contractors will become irritated if they feel they are not receiving the responses they need to fulfill their assignment requirements.

Ask for Feedback

Working with contractors is a two-way street; it is not just about the work they do for you but also what you do for them. Therefore, asking for regular feedback is a good way to keep your contractors happy. For instance, are they enjoying the project? Are staff members providing them with the required access? Is everyone being responsive to their queries? Do they feel they have the required clearance to carry out the work effectively? These are all things to consider when requesting feedback from contractors.

Timely Payment

If you have a set date for paying your contractors, make sure you adhere to this as otherwise, you will not only have a disgruntled contractor on your hands, but your reputation could be tarnished too. Contractors will only feel valued if you pay them as per the agreed date.

If you foresee any payment issues, such as errors in the invoice, late invoices received, or late timesheet submissions for Time and Material projects as examples, then speak to the Contractor before the agreed payment date to resolve any of these issues before it becomes a big deal!

Deal with Issues

If the contractor is experiencing issues with the project they are undertaking, or the individuals they are dealing with, it is not their responsibility to manage this. You need to be able to take these issues on and deal with them on behalf of the contractor. They are not part of the company; therefore, they should not have to deal with internal politics or issues that affect their work.

At myCOS, we understand the challenges you face when dealing with multiple contractors, which is why we manage contractors on your behalf. We ensure they are happy within their roles and committed to their project so that you can get on with your day job. If you are looking for contractors, and need our help, email info@my-cos.net to arrange a call.

 

 

 

 

 

Common Mistakes that Can Affect IR35 Rules

IR35, or off-payroll working as it is commonly known, relates to contractors and how they work. The purpose of IR35 is to prevent contractors from working like employees while also benefiting from the advantages of contract working. If you are deemed as working ‘inside IR35,’ it means that HMRC views you as working as an employee. If you are ‘outside IR35’, where contractors want to be, you are deemed self-employed.

How do you define self-employment?

According to the HMRC, ‘a person is self-employed if they run their business for themselves and take responsibility for its success or failure.’ If you hire a self-employed contractor, they take full responsibility for their taxes etc. A person can be both a contractor and an employee. For instance, they may work part time as a contractor while being in part time employment the remainder of the time for another company. Many considerations take place when defining the status of a contractor. For instance, a self-employed person will usually bid for work rather than being invited for a formal interview. They will submit invoices to get paid for their work and take responsibility for their own National Insurance and tax. Self-employed contractors will not be under direct supervision, will work on their initiative, and will not receive sick pay. It is vital that you keep this in mind when hiring contractors and ensuring you meet the IR35 requirements set by HMRC.

Inside or Outside IR35?

IR35 now affects all businesses and navigating around can be a minefield. It is crucial that employers understand the definition and what they can and can’t do, as they will likely face scrutiny by HMRC. These are some common mistakes made by employers that can end up affecting contractor status.

  • Using wrong terms – understandably, you want your contractor to be part of your team, but you should refrain from referring to them as ‘staff, employee,’ etc. – especially in formal communication. If HMRC decides to do a spot check, this error would instantly signify that the contractor is operating inside IR35.
  • Setting shift patterns – there could be reason for HMRC to question IR35 status if you have set shift patterns for your contractors. It is not to say that contractors can come and go as they please, but generally, they would work within a set period, and it would be their discretion to manage this.
  • Office working – unless there is a specific reason for it, contractors usually wouldn’t be forced to work in an office. Instead, they would be allowed to work flexibly.
  • Company benefits – contractors should not benefit from the same perks as employees. For instance, they shouldn’t receive overtime rates, pensions, paid sick leave, etc. If you are offering this, you best be prepared to answer questions as to why during your audit.
  • Hours worked v project outcomes – although finance will need to know hours worked, it is also a good idea to ask contractors to record their project outcomes. It will reassure HMRC that they are operating differently from employees.
  • Staff events – although it is a nice idea to include contractors in team events, you should avoid inviting them to company-specific events – unless it is made clear that they are a contractor.

There are a lot of hurdles to overcome with IR35, especially since the recent changes are relatively new. However, if you are looking for contractors and want to ensure they are outside IR35, we can help through our dedicated outsourcing service. Contact us today at info@mycos.net.

 

 

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