Contractor Management Challenges for Recruiters

3 Solutions to Contract Recruitment’s Biggest Challenges

With the economy continuing to open up following the Covid-19 pandemic and the UK government announcing an end to restrictions in the coming weeks, business and industry recovery – and therefore prosperity for the recruitment market – is close on the horizon. However, given recent shifts in candidate behaviours and interests, growing skills shortages and legal changes to tackle, recruiters have a range of challenges to contend with in 2021 and beyond.

Generate’s payroll and compliance specialists have helped thousands of recruiters and their contractors through legal, tax and work-related challenges. Here are the top three challenges recruiters face with their contractor candidates – and the solutions to each challenge.

3 Solutions to Contract Recruitment’s Biggest Challenges

1. Navigating IR35

Arguably the biggest buzzword and most impactful change in temporary staffing, the IR35 tax reforms have caused significant concern and increased workloads for contractors, recruiters and end clients alike. To help ease tax and compliance-related frustrations whilst ensuring compliant recruitment processes and reducing legal risk, recruitment consultants can adopt a variety of methods:

  • Pay Attention to the Detail – Rather than simply relying on the UK Government’s Check Employment Status for Tax (CEST) tool, which has recently been proven to deliver inaccurate results in around 1 in 7 cases, recruiters can encourage candidates and end clients to take an individual, detail-oriented approach to determining whether a candidate is inside or outside IR35. Although the latest legislation changes place the burden of status determination on the client, many client businesses will struggle without any prior experience or legal expertise. Direct involvement from recruiters with knowledge of their candidates and their industry will be beneficial all round.
  • Get Help from Public Sector Colleagues – Recruitment consultants in your agency or your network who recruit across education, health and social care will have a wealth of experience in IR35. Since the off-payroll changes were implemented in recent years, the UK’s public sector saw 76% of departments lose highly-skilled contractors, however after the initial pain points, public sector contracting is still popular, profitable and successful for all involved. Tap into the first-hand knowledge of your public sector recruitment connections to get a head-start in navigating the legislation changes.
  • Collaboration – Forming trusted relationships with both contractors and end clients will help recruiters identify problems before they happen. Close communication during the status determination process means that consultants will have a much better idea of the accuracy of testing method used, and therefore can much more readily both intercept likely inaccurate results and help steer end clients and candidates towards more reliable status determination tools.
  • Partner with an Expert Supplier – The support of a payroll and contractor management company with an on-site compliance team could prove the difference between accurate IR35 status determination and significant legal implications. Recruitment consultants can best protect their agencies, end clients and contractors by working with compliant providers.

2. Smaller, More Niche and Harder-to-Reach Candidate Pools

Despite the redundancies and contract cancellations of Covid-19, which saw hundreds of thousands out of work, skills shortages remain rife across industries. In 2021 the Learning & Work Institute reported in March 2021 that the UK was ‘heading for a digital skills shortage disaster’, with demand for skills such as AI, cloud and robotics jumping by 400% this year in areas such as Newcastle, whilst the number of young people studying IT in schools declined by 40% in the past five years. The health and education sectors are also suffering as increasing numbers of staff depart the caring and teaching professions, leaving the UK short of 40,000 teachers and 50,000 nurses.

Contrary to predictions, the pandemic has also further cemented the power of candidates in the employment market. Whilst in June 2021 the volume of job vacancies had increased by 12%, the number of applications per job has been steadily declining by 3% every month for the past few months, and by a significant 22% year-on-year. Far from desperation to take any job to pay the rent, many professionals have used the pandemic to step back, analyse what they really want out of life and changed their jobhunting mindset, placing power back in the hands of candidates.

Recruiters can best capture the attention and engagement of ever-reducing and more discerning talent pools by truly getting inside the minds of each talent pool. What do your candidates want? What are their needs, goals and challenges, and how have these changed in the past year? Savvy staffing specialists who tailor their message, sales approach and conversations to fit their audience, and who take additional efforts to reach these candidates in their own spaces and on their preferred channels, will capture top candidates before the competition.

3. Candidate Retention

Although temporary specialists needn’t have the same alignment of business values and long-term goals as would be expected from a permanent hire, personality clashes between short-term workers and their managers or colleagues can spell disaster. Candidates who leave contracts early, even for good reason, can often disappear into the ether despite the best efforts of recruiters, meaning the consultant and their agency lose valuable skills.

Effective methods for to help contractors both complete their full assignments and remain with the representation of their recruitment agency include:

  • Onboarding – Ensuring every contractor receives full support in the first few weeks of their new roles, no matter how experienced they are. Provide them with all the information they need, offer personal support as well as professional advice, and work with your end client and contractor to create an onboarding plan that is tailored to the role, needs and likely challenges of each individual candidate.
  • Communication – Check in regularly through both email and phone to provide ongoing support throughout the contract. Maintaining friendly verbal communication will help contractors confide in their recruiters upon encountering difficulties, rather than keeping silent and trying to handle it by themselves.
  • Automation – Use your CRM and invest in email automation tools to help your agency keep track of which candidates are on assignment and when contracts will finish, empowering you to proactively identify backfill needs and opportunities for current runners in similar upcoming roles that they may be interested in.

Payroll & Contractor Management Services for Recruitment Agencies

Need support with payroll, tax or questions about your contractors? Generate’s team of payroll and contractor management specialists are on hand to help. Want to set yourself apart from the competition by finding the best candidates in your market? Discover 3 Ways the Best Recruiters Find High Quality Candidates


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