Day rate contractors more cost-effective than fixed-term contracts
by Alan Little
VMAGROUP, the leading international contractor and permanent recruitment and executive search specialist for communications, digital and marketing, has revealed in a new study that hiring contracting professions on an interim day rate basis is frequently less costly than using fixed-term contracts.
The group’s latest “Bridging the Gap” report into the UK’s contractor market within the communications and marketing industries explodes an entrenched myth amongst the sector’s employers that day rate contractors are an expensive option of last resort. On the contrary, the study clearly illustrates that hiring contracting professionals within these industries on a day rate basis is more often than not a more cost-effective choice.
The headline findings are:
- Demand for project-based communications and marketing assignments for contractors is climbing significantly.
- Over half (55%) of contractor assignments in communications and marketing focus on specific assignments needed by the hiring organisations.
- Contracting professionals specialising in communications and marketing are predominantly exceptionally experienced people, with well over half (61%) having worked in their chosen profession for over 15 years.
There is, however, a cloud on the horizon in the form of the widely anticipated, though widely resisted, the arrival of IR35 reforms in the public sector, which some experts fear may be imposed as early as April next year. The reforms, the report found, will have an impact on the current size of the contractor talent pool for communications and marketing.
The key findings were:
- An overwhelming majority of contacting professions of 75% disagree with Government plans to extend public sector IR35 reforms to the private sector.
- 51% of the contractor respondents in the survey reported that they planned to go on contracting on a day rate basis even if the controversial legislation is implemented.
- 23% plan to continue contracting on fixed-term contracts if the reforms hit the private sector as expected.
21% say they will abandon contracting altogether if IR35 reforms arrive and return to permanent, salaried employment instead.
Commenting on the survey, VMAGROUP’s Associate Director of Interim Communications and Marketing in the UK, Andy MacLeod, said: “There is a common misconception that hiring interim professionals on a day rate is more expensive than fixed-term contracts. Whilst every situation is different, in reality, organisations can actually save on costs by hiring an interim on a day rate basis and will often benefit from hiring a more senior professional with relevant experience who can manage the assignment in a three or four day week.”