For many decades, employment was a relatively stable affair. Often, a young person would gain an apprenticeship with a company, particularly one where there were already family connections, perhaps through older employees. Over the years,employees were trained and gradually rose up the ranks to occupy more senior positions until the time came to retire.
This “job for life” scenario had some advantages, in that employment prospects were generally as good as the employee’s ability to develop skills and respond to change, and there was usually some kind of modest pension arrangement on retirement. The job market today is very different, however, and there are now a number of ways in which employers can consider attracting and retaining workers.
Recruitment procedures have been modernised substantially,and although some connections are still made through word of mouth, many are made through alternative means, including social media. There are rules about how you can appoint people as well as the terms and conditions that you should offer to employees. The government website dealing with employment law sets out appropriate processes for recruitment, hiring, contracts, managing redundancies, handling payroll, statutory leave, hours of work and workers’ rights, among other relevant topics.
Exploring the pros and cons of traditional models, it quickly becomes clear that employers may benefit from consistent and reliable performances on the part of members of staff who have worked with them for some time. This is a bonus as they are building a workforce on which they can depend. These employees build up a knowledge of the business and are well placed to identify strengths and weaknesses in the business model, which can be helpfulto employers seeking to develop andpromote their company more widely.
Of course, there is also the possibility that these employees may settle into a familiar routine and pattern of work, and may lose their competitive edge as they become more comfortable with the existing infrastructure. Long-term employees may also resist change when it is presented to them, which can make it hard for employers keen to introduce new ideas or innovative ways of working.
An alternative way of employing people takes a more forensic approach. This is a solution that allows employers to recruit and select individuals to precisely fill skills gaps, without appointing full-time permanent employees. This model enables employers to determine both the areas of expertise that they want to cover and the number of hours per week, month or year that they need that particular type of assistance. For example, if your company needs help with IT tasks, it may be that two days per week gives you sufficient cover. If you also have the flexibility to expand or reduce the number of days needed, you are in a strong position to optimise the talent of those you recruit, without committing to an ongoing hefty payroll.
In such a situation, working with an umbrella company is ideal as it protects the rights of the employees as well as helping the employer make the best, most productive decisions for the business as a whole. It’s also good for the contractor as the umbrella company will take care of all the administration, including processing tax and national insurance payments and factoring in business expenses, so that the employee doesn’t have to handle the extra work. Arguably, the flexibility of the system could be disadvantageous to the independent contractor if work from one particular source unexpectedly falls away; however, as they are at liberty to work for other employers, this is not likely to be a major issue.
Using an agency to recruit temporary or short-term employees is another possible option when you wish to appoint new members of staff, whether full-time, part-time or casual. In many cases, this solution is ideal for filling a short-term, temporary gap in skills. In this case, an employer can submit job outlines to recruitment agencies, which then seek out candidates on their behalf. On the plus side,this saves the employer time in terms of implementing recruitment procedures, and it may result in a relatively quick selection of candidates being presented for interview. However, agencies are only as good as the people who participate in their recruitment processes, so they may miss ideal candidates that an employer could have found elsewhere.
On balance, the nature of your business and your plans for future growth will help you determine what’s right for you. Start-ups may benefit by beginning with the contractor option and then deciding if a traditional workforce model should be part of their future expansion.