What does it mean for HR and recruitment?

September was certainly a significant month for the UK’s political scene. Having welcomed a new Prime Minister and a new cabinet at the beginning of the month, businesses across the country waited to hear the plans from the new Chancellor Kwasi Kwarteng in his Mini-Budget.

Despite the name, the plans outlined by the Chancellor were significant and certainly show that the Truss administration is committed to driving change to support economic growth across the country. As the trade association for the professional recruitment sector, we welcomed many of the actions, but it was the IR35 repeal that has us – and employers and contractors across the country – celebrating.

Bolstering the flexible labour market

The roll out of Off Payroll into the private sector had a significant impact on the UK’s flexible labour market. While we recognise that there is a need to regulate and safeguard those in the non-permanent workforce, APSCo has long been vocal on the need to tailor any regulation to the nature of certain roles.

As seasoned HR professionals are acutely aware, the needs and demands of highly skilled professionals vary significantly from the likes of agency workers. However, IR35 rules did not recognise these differences. And businesses have felt the impact of this since Off Payroll came into force, with many contract professionals choosing to go into permanent roles to avoid the potential risks of incorrect determinations.

In fact, the Association of Independent Professionals and the Self-Employed (IPSE) revealed in 2021 that 35% of contractors had left self-employment since Off Payroll rules had been enforced. That’s a significant number of highly trained professionals that many employers could no longer access on the flexible basis they’d become accustomed to.

With widely reported skills shortages growing across the country for most of 2022, APSCo continued to lobby on behalf of the recruitment market for changes to the legislation to bolster the flexible labour force that our members and end-hirers were in need of. This repeal was a huge win for the hiring market and we’re hoping to see the positive outcome of this relatively swiftly.

Skills back on the agenda

Of course, the Chancellor’s budget revealed much more than the IR35 U-turn and while I won’t go into detail on everything, myself and the rest of the APSCo team were certainly pleased to see that the skills agenda is a high priority. Plans to encourage older workers back into employment and the regional investment zones to boost jobs and skills are all steps in the right direction for the country’s talent recovery.

This does need to be underpinned by a joined-up approach across not only Government bodies, but also all stakeholders in the talent pipeline. Building a strong skills market requires co-ordination between education institutes, employers, industry bodies, recruiters and relevant Government bodies to drive a long-term impact.

We know through our close collaboration with our recruitment members that staffing firms have the resources, knowledge and connections to help drive the skills needs of UK firms. They have the broader data and access to talent pools that can inform regional skills investment and help source recent retirees.

APSCo is already driving collaboration across the talent supply chain, bringing together the insight of our recruitment members with the expertise of RPOs, MSPs and end hirers from global brands through APSCo OutSource and the OutSource Client Community. We will continue working with these stakeholders and Government policy makers to support the skills needs of the UK and we urge HR teams and employers alike to join collaborations like this and ensure their voices are heard.

The strength of the country’s skills impacts us all and we all have a responsibility to drive the changes that our businesses need.