Solving the challenge of long-term contractor tenure

Recruitment  •  3 March 2023

Contractors are an important component of many organisations. As on-demand resource, they fill critical gaps and provide a flexible solution to meet business needs for talent and skills.

But relying on this engagement method isn’t without risk. There are several considerations for an effective non-permanent headcount strategy, but the fact that 52% of contractors are reported to have tenure in assignment of over two years is one of the most serious. This length of engagement exposes the organisation to co-employment risks and headaches that can begin to outweigh the benefits of using flexible resource.

Resource Solutions’ Transition and Replacement Programme addresses these problems whilst providing a powerful solution to talent supply and management.

Tenure restrictions – typically limiting contractor engagements to either 52 or 104 weeks – are often imposed by businesses wishing to reduce the operational, legislative and employment law risks associated with contractors’ rights including unfair dismissal and redundancy. These rights begin after a qualifying period of two years' service with the employer, however restricting tenure to this limit can create a problem when the resource is critical to ongoing and long-term business requirements. 

Taking the contractor on as a permanent hire is often difficult given the difference between Contingent rates and equivalent Permanent salary. The conventional solution is to either accept the risks associated with ongoing engagement (including potential loss of business critical IP at short notice) or to wave goodbye to valuable talent.

Resource Solutions’ Workforce Consultancy model enables organisations to maintain non-permanent resource without the costs and obligations of permanent hires, or the risks associated with ongoing contingent worker assignments.

Transitioning Contractors to Consultants

Our Transition and Replacement programme offers the same risk-protection of a tenure policy whilst allowing Hiring Managers to continue using specific long-term contractors.

Following a consultation period, the programme provides the contractor with the option to transition to permanent employment with Resource Solutions, who deploy that worker back to the end-hirer and in doing so take on the full risk of employment.

This enables the worker and end-hirer to continue indefinitely in their engagement without any employment liability risk. Once the assignment has ended the worker has the option to be re-deployed to a new assignment, either with same client or elsewhere in Resource Solutions’ wider estate of client partnerships.

A case study for retaining business critical resource.

Our Workforce Consultancy team recently completed a large-scale contractor transition programme for one of the world’s largest mining organisations.

With a tenure mandate approaching that captured over 70% of their UK contingent resource headcount, the organisation faced the unwanted departure of a significant proportion of their business-critical software development and solutions architecture expertise. The consequence of this would be the reneging of existing obligations and the failure of essential programmes of work.

Through consultation and negotiation with the individual contractors, our Workforce Consultancy team managed to retain and re-deploy this talent by transitioning 88% of the workers to permanent employment with Resource Solutions (with others taking up permanent roles within the organisation or choosing to exit).

Benefits for client and contractor

In the above example, the outcome and result of this transition programme was extremely positive for both contractors and the business. 

Resource Solutions truly operated as a partner through this project and executed to plan, providing timely updates, and working with our financial advisors to resolve complex compensation queries. We have been pleased with the management and support provided,” said the key project stakeholder for the client.  

A Transition and Replacement Programme from Resource Solutions’ Workforce Consultancy team provides a flexible and risk-free model to retain talent and overcome tenure challenges:

  • Retain the experience, knowledge and skills of proven contractors – we work with you to develop training programmes that are aligned to your needs and deployed to the Consultant.
  • Provides contractor benefits including skills development, employment benefits, pension, and ongoing employment.
  • Additional HR wrap around support and performance management of the resource from our Service Manager.
  • Eliminates all risk of IR35 - all consultants are permanent employees of Resource Solutions with and all tax and NICs managed accordingly.

The upside of this model isn’t just limited to the end-client. Becoming a Workforce Consultant provides enormous advantages to the former contractors who enjoy a wealth of employment benefits (pension, healthcare, life assurance, income protection, critical illness, dental plans) as well as the security of continuous employment. Bespoke training and development pathways are provided through our Learning Academy, future proofing skills to ensure the Consultant is equipped with the in-demand core tech skills required by the end hirer.

If you would like to find out more about how our Workforce Consultancy Transition and Replacement programme could help you retain critical contractors and manage risks, get in touch.

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