Interim Pay Rate Guide 2023
Interim Market Activity 2022/2023
The Interim market picked up as 2022 progressed and looks buoyant as we enter 2023. The year saw interim rates slowly rising, with the third quarter of the year showing significant increase in demand and pay rates.
Indicators and feedback from our clients are that many are beginning to take a more cautious approach to long term workforce expenditure. With economic uncertainty and fear of recession, we have seen an uptake of Interim demand as Permanent recruitment activity has softened slightly. We saw this most notably in the last two quarters of 2022, with a slight slowing of permanent activity, but a significant upward shift in Interim demand.
In the last quarter of 2022, we saw a 100% increase in interim demand, and we expect the market to remain strong as businesses adopt more cautious, risk averse short and medium-term recruitment strategies as they deal with economic uncertainty and recession challenges.
Like almost all sectors in 2022, Procurement and Supply Chain was challenged by skills shortages in a candidate led market, and although recession is likely to bring some redundancy labour into the market, we believe that many of the high demand specialist procurement and supply chain skills will remain in short supply, strengthening demand for talented, results focused, and project based interim contractors. Many businesses will continue to find it hard to recruit permanent talent that tick all the boxes, and employers will need to be flexible and creative as to team skills to fill roles. Utilising ‘hit the ground running’ interim specialists can be a resolution focused and cost-effective option.
We anticipate Interim Rates are likely to strengthen slightly as we move through 2023, although as ever, particularly specialist category expertise or exceptionally hard to find and skill sets will see more significant increases. Wage inflation will also put slight pressure on interim rate increases to match comparative permanent staffing salaries.
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RATES TABLE
The following table provides current day rate guide for various level of Procurement and Vendor Management specialists, for inside and outside the IR35 Off-Payroll regulations. Focusing on Indirect Specialists in FTSE100/250 & Fortune 500 organisations.
INTERIM RATE GUIDE - Procurement & Vendor Management Specialists: January 2023 (Focusing on Indirect Specialists (FTSE100/250 & Fortune 500 organisations)
**** FOR THE LATEST MARKET INFORMATION, PLEASE CONTACT OLIVER LEWSLEY: E: oliver@beselect.co.uk or T: 01403 248448 ****
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Specialists and Categories in Demand
Information Technologies: SAAS, Software, Cyber, Apps Development, Hardware, Datacentres, Infrastructure and Networks:
Required across most sectors, but we have seen the greatest demand within FinTech, Media, Pharma, Logistics & Supply Chain organisations. Businesses are having to very rapidly change their work and supply chain models to ensure competitivity, and technical ‘hit the ground running’ procurement specialists across most Hardware and Software categories, are in strong demand.
Digital Marketing Specialists:
Required across almost all sectors, although changing working and customer interfacing methods in Banking, Retail and Pharma sectors have seen the greatest demand. The Pandemic brought a rapid and unprecedented change in how business market, supply and buy, and the demand for Interims that can define and implement these new digital marketing processes has seen a significant increase in the demand for Interims in this area.
HR:
Changing work pattern and the challenges of securing the best talent has led to an urgent increase in demand for HR specialists, particularly within Managed Service Providers and Recruitment sectors. Interim specialists with solid recent experience in these sectors can secure great roles.
Logistics & Supply Chain Specialists
Ongoing supply chain volatility Ukraine/Russian war, Brexit, and ongoing fallout from the global pandemic; continues to focus the necessity for effective Logistic and Supply Chain Strategies and Management.
Vendor/Risk Management Specialists:
Procurement specialist with solid Supplier Risk Management experience is still very much in vogue, and candidates with a strong experience in Fraud, Quality, Compliance, Cost and Delivery strategy and implementation are being snapped up fast. Interims with proven skills in reducing supply chains risk and de-carbonisation are also highly prized.
Interim Trends 2022-23
Off-Payroll Regulations (IR35):
Many companies continue to approach interim labour employment terms cautiously, particularly the larger corporates who take a very risk averse policy to help mitigate tax liability and reputational risk with most roles secured on an Umbrella or Fixed Term Contract basis.
We see most mid-level roles engaged on an inside IR35 PAYE day rate or in some instances a Fixed Term Contract (FTC). For nearly all larger corporates most roles are still deemed inside IR35. In smaller and mid-size organisations there seems to be a circa 50/50 split inside to outside. However, for very senior and genuine ad-hoc consultancy roles, most will be on an outside IR35 basis. The Increase in employers National Insurance contributions and apprentice levy that inside IR35 contracts incur make them less appealing still.
Engaging Interim’s on an outside IR35 basis, where applicable, will undoubtedly help an organisation attract the best talent available and offer the true Interim Consultant the benefits of limited company status, which will aid commitment and help secure positive project outcomes. Outside IR35 roles are still more popular amongst contractors and are likely to remain so.
What is happening with Rates:
In 2022 as specialist permanent roles remain unfilled, demand for very specific skills increased and underlying salary inflation rose, we are seeing upward pressure on interim (or equivalent FTC) rates. In a market where wage inflation is at a recent all-time high, the ‘like it or leave it’ approach adopted by some organisations earlier in the year is not sustainable and interim rates, particular for contracts inside IR35 are increasing to ensure hirers secure the interim talent they need.
We anticipate interim rates, particularly ‘inside’ rates, strengthening slightly as we move into 2023.
Geographical Differences:
As you would expect London based roles will secure the highest day rates. Rates are affected by the cost-of-living level with higher rates being secured in London, closely followed by the Home Counties; particularly if the interim role requires mostly office-based working. However, with a lot of contractors undertaking hybrid roles that require only occasional visits to the office, these hybrid working practices have started to blur day rate regional weightings.
Where and how we work:
There has been significant demand from job seekers for hybrid working. Post pandemic we have seen most Permanent and even more contractors looking for fully remote working options.
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Conclusions
The need for an agile Procurement and Supply Chain workforce is we believe greater than ever. As organisations try to adapt to a rapidly changing world post Covid-19 pandemic, post Brexit, war in Europe, global supply chain pressures, inflation and changing consumer patterns; and we see the underlying demand for talented Interim procurement and supply chain professionals remaining solid.
The Interim market strengthened as we progressed through 2022 and we expect to see this maintained (assuming major economic recession does not cause significant fall in commercial activity). A flexible and skilled Interim Procurement and Supply Chain workforce is a critical contributor to economic success and business growth in such a fast changing Global and UK economy.
The market has found some equilibrium and is now well adjusted to the IR35 Off-Payroll regulations. However, the type of contract to engage will have significant effect of the candidates attracted. It remains the case that organisations that have determined their roles fall outside of IR35; or have a Statement of Works Contract, are likely to get a better slice of the available talent pool.
To secure critical projects, whether working inside or outside IR35, careful consideration needs to be given to the rates to ensure attraction and buy-in from specialist Interim talent that is increasingly in short supply.
Overall, we are seeing continued growth in Interim Procurement and Supply Chain recruitment; interim and permanent rates are strengthening ahead of average UK wage increases; with Procurement and Supply Chain now much more visible amongst the public and board level decision makers putting the function into a more influential position than ever before.
The main challenge is securing the talent needed in what is becoming and ever more competitive market. Attraction policies, whether for Permanent or Interim staffing, need to be carefully considered and accurate and up to date market knowledge is essential to ensure organisations implement HR resourcing policies that reflect the reality of a competitive talent market.
For detailed information on the current recruitment market, please contact the Beaumont Team on:
T: +44 (0)1403 248 448
The Beaumont Select Recruitment Team
Beaumont Select INTERIM RATE GUIDE and Market Bulletin, January 2023