Businesses recognise value of interims in hard times

Businesses in the UK are waking up to the fact that interim managers and other freelance professionals will play an increasingly important role in the nation's economic recovery.

Politicians, however, are taking longer to catch on to the fact that interims will provide a valuable resource for UK plc in the years ahead, and proposed legislation still represents a significant threat to the most flexible part of the British workforce.

Recruitment and human resources (HR) experts believe that the UK has escaped relatively lightly in terms of unemployment in the recession, despite recording a bigger fall in GDP than most major countries.

Delegates at the recent CIPD annual conference heard that up to 50 million jobs have been lost globally since 2007 in the worst crisis for the global economy in more than 70 years.

Speaking at the conference, Suzanne Rosselet-McCauley, deputy director of the World Competitiveness Centre at the IMD business school explained that while the UK's unemployment rate remains under 8%, the jobless figure is 10% in the US and 18% in Spain.

However, the UK economy has suffered more than most overall, shrinking by 5.5% in the year up to June, compared with a EU average of 4.8% and 3.9% for the US. Japan and Sweden are the only major economies that have performed worse.

The reasons for this unusual reversal are varied, and hotly contested, but many economists believe that UK businesses have learnt the lessons of the last recession when laying-off staff to reducing the payroll was seen as the quickest way to cut costs as orders declined.

However, businesses across a wide range of sectors, manufacturing in particular, were left with a significant skills gap when the economy picked up.

With changes to how companies train employees and the investment into career management, this time around many firms have looked at alternatives to redundancy, including introducing a shorter working week a means of retaining skills that they will need to remain competitive once the upturn arrives.

Equally important has been the more general flexible working culture that has been implemented by many employers and into the wider UK workforce, coupled with an increasing reliance on self-employed contractors, interims and agency staff.

Penny Power, Founder of social business network Ecademy, suggested that self-employed people have become increasingly valuable to businesses during the recession.

She is reported as saying that businesses have hired consultants, suppliers and external advisers for a long time, but there is now a distinct shift toward a networked model of resourcing, rather than an institutional one of having employees that work full time.

As well as being good for business such a model may be good for freelancers themselves.

The importance of interims and freelancers to future economic growth has also been recognised by the rebranded PCG, formerly the Professional Contractors Group.

To mark its tenth anniversary, the organisation recently launched a Manifesto for Freelancing during a special reception at the House of Commons to celebrate National Freelancers Day.

John Brazier, Managing Director of PCG said freelancers bring a degree of flexibility and a skill set which is a real asset for UK plc. The manifesto clearly outlines the key messages the major parties need to adopt, in order to allow this vital part of the economic landscape to flourish.

He went on to say that freelancing is helping business cope with the recession but there has to be a fair deal from government.

Freelancing must be recognised as a legitimate business model, he explained, and measures such as IR35 continue to place an unfair burden on nano-businesses.

In order to develop an enterprise-friendly economy government needs to address these faults in the tax system urgently and the PCG will be continue to take this message far and wide in the run-up to the election, Brazier added.

The PCG's manifesto covers five main themes; recognition of freelancing as a valid way of working, fairer taxation, better regulation, easier access to the market and a positive vision for the future of freelancing.

Meanwhile, the Recruitment and Employment Confederation is also campaigning on a range of issues that will have an impact on the recruitment industry, HR professionals as the country emerges from recession.

It argues that the Agency Workers Directive should not be implemented until 2011 to limit its impact on the market during the recession.

A consultation on the controversial legislation came to an end recently and both the REC and the CIPD have both called for a delay over concerns that the current directive could strangle demand for temporary workers from HR departments wanting to add flexible workers to their payroll.

At the same time, the short and medium outlook for growth in recruitment continues to show some improvement, according to the latest REC Jobs Outlook.

Despite this, the immediate future for the jobs market remains uncertain with some economists warning of a the threat of a double dip in the economy once jobs are lost in the public sector as a result of cost cutting measures to reduce the budget deficit.

As a result it will remain a tough market for jobseekers for some time to come, with employers looking at increasingly sophisticated methods to identify the ideal candidate, methods such as psychometric tests and personality profiling. But interims and other temporary workers may find their flexibility to be one of their greatest assets.