Managing IR35 for a major independent public body

As managed service provider, we worked with our client to prepare and manage the public sector IR35 reforms in April 2017.

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The Challenge

Managing IR35 changes across a large contractor workforce, whilst ensuring retention of, and access to talent. Supporting our client’s ability to continue delivering against its strategic objectives.

As a user of significant contingent resource, our client required a recruitment partner to plan and implement IR35 legislation changes. They required expert guidance on redesigning processes, policies and resourcing strategy so that it could continue to meet its regulatory requirements and deliver the important work that it provides to the public. In addition to ensuring that the organisation fully understood the IR35 reforms and had compliant processes in place, key concerns included:

  • Managing communications with incumbent contractors around the IR35 changes
  • Ensuring high levels of retention of incumbent contractors following implementation of reforms
  • The ability to attract and engage highly skilled contractor resource going forwards

The Solution

A comprehensive IR35 change management programme delivered jointly by our in-house IR35 experts and our dedicated client account team.

Our solution can be broken down into the following steps:

  • Awareness: We took a pro-active approach to ensure that key client stakeholders were fully informed about the upcoming legislation and the risks posed by the large incumbent contractor worker population
  • Preparation: Our in-house IR35 experts and the Client Director conducted an impact assessment on the client’s current workforce, assessing the financial and operational impact of applying current and potential future operating models
  • Focus Group: In partnership with senior client stakeholders, we conducted a focus group with senior PSC contractors to discuss potential reactions to different operating models and identify the best approach for the rest of the contractor population. We held a series of additional workshops with every PSC contractor, detailing an outline of the choices available and agreed deadlines
  • Management: We supported workers throughout the change; providing information and help where required. Once workers had selected an alternative operating model, the account team ensured methods of engagement, pay rates and contractual arrangements were all compliant with the reforms and updated within our systems

The Results

IR35 changes were delivered successfully both with the client and across the contingent worker population, leading to Deloitte citing our approach as a leading industry example.

We successfully transitioned the workforce to an adjusted operating model one month ahead of the legislative change, with minimal impact on retention rates. This entire project was also conducted alongside business as usual activities, with no impact on day-to-day service. Subsequently, our client’s external auditors, Deloitte, stated it was one of the best managed processes they had witnessed concerning IR35.

Working with our client to create effective attraction strategies, we have continued to be able to attract and retain sufficient volumes of highly skilled flexible workers, even with direct competition from nearby private sector businesses (that do not yet have to comply with IR35 reforms required by public sector businesses) sourcing similar skill sets. This has ensured our client has been able to meet its regulatory objectives and continued to provide a valued service to the public at the levels required.

Central Government
  • Developed robust IR35 strategy and impact assessment
  • Managed changes across 400+ incumbent PSC contractors
  • Our management of IR35 cited as exemplary by Deloitte

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As a business that delivers change projects and consultancy, the changes in the application of IR35 legislation has a big impact on us and our clients. Whether it is making sure we are managing the legislation effectively, or helping our clients ensure they are handling it effectively, it has an impact on what we do.

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