Reply to: Post April impact on recruitment agents

[Brussels Slumdog]

Europe is dead for English speakers. Just because I speak French at home doesn't mean that I know what a costing variant is in French.I have never seen a SAP book in Dutch or French.

Where do you get your advice on tax etc per country? Im also an SAP contractor, now looking and the UK is dead. Im ready to go Europe, Germany seems to be very busy and popular. Who can I use for advice?

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[quackhandle]

They'll still be finding new and novel ways of screwing us on rate.

Sink or swim time for us all.

qh

[LondonManc]

Do you guys mean SAP ABAP/BW or SAP BI/BO?

[dx4100]

or fresh out of school burger flippers

Most of them have degrees - but with the sort of degrees they would end up flipping burgers with normally - media studies and such like...

[exsapuk]

I am a SAP contractor. Most of the agents that I work with have opened offices in Europe. The UK market is only a small percentage of their turnover. I would accept a contract under 6 months in the UK even if it's inside IR35 as the tax rates in Belgium are higher.

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Where do you get your advice on tax etc per country? Im also an SAP contractor, now looking and the UK is dead. Im ready to go Europe, Germany seems to be very busy and popular. Who can I use for advice?

[Brussels Slumdog]

I am a SAP contractor. Most of the agents that I work with have opened offices in Europe. The UK market is only a small percentage of their turnover. I would accept a contract under 6 months in the UK even if it's inside IR35 as the tax rates in Belgium are higher.

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[GigiBronz]

increased turnover in this period. Maybe they are on fixed % but they’ll push the margins up(as we can see), play tricks with the invoices. Charge the client for extra that does not go to you.
An example is the ‘08 crisis where they were very busy and most agencies showed a profit.
At an old client they would call around and ask: “how low can you go”.(while being in contract)
Yes, probably long term it will be less of them but if you think your job is not equally at threat(outsourced , replaced by cheap resources etc) than you should think again.

Recruiter bashing is not nice but they should know their place. Most of them believe the contract is theirs and they are doing you a favour by letting you do the work.

[DevUK]

Not going to get into it too much, but I take recruiter-bashing with a pinch of salt, and I'm seeing hints of it in this thread. The fact of the matter is a lot of contractors, especially those not yet with their own network built up, will be using recruiters for majority of their opportunities. They're a vital part of the game.

To answer the question, recruiters will undoubtedly take a hit while the market's on it's head, of course they will. I'd be very, very surprised if every, what would be, contract opportunity is still out there but now inside/perm instead. It's a case of waiting while clients sort themselves out and stop needlessly panicking. During that time, how are people suggesting recruiters are going to be as busy?

[GigiBronz]

So, are we starting to care now about the agents? The same ones that try to pull all the tricks in the book on us.
The ones that with 2 months to go before 6th of April, do not mention if a role is inside or outside, then pretend they don't know?. (Yes, had 2 of them trying to do this in the past 2 weeks)
The same ones that are trying to sell roles on 200pd knowingly that people are desperate and might go for it.

The reason the market operates in the way it does, ltds and so is because, that was the preferred option to suit all the parties at the beginning. There are a lot of permtractors there that did not choose to be contractors or have ltds but that was on of the options suggested. They would have been fools to surrender 30-40% of their income for any other option. Now they get the blame for avoiding tax. Madness.

You must have Stockholm syndrome if you feel any sympathy for them.
Just my 2 cents.

[Cirrus]

IPSE plus membership covers you for that,

I think you'll find that IPSE merely have a pot of cash. If there is a problem they will share the money out amongst the people affected. There is no guarantee you will get what you should or indeed get anything. I took this up with them - it looks like a financial product that they are not permitted to offer, and almost certainly one that does not follow FCA standards. They took it all on board - and banned me. Trust that bunch of self-deluded *******? You must be joking.

[mogga71]

I slightly surprised that there's been so little discussion about the impact of the IR35 changes on rec. cons.

It's clear that many agencies, particularly those targetting financial services, face an existential threat after April. Since many contractors on this forum deal through these intermediaries I would have thought that their financial stability would be more of a concern than it appears to be.

Sorry, but I don't get this. Why? Nothing has really changed for them. In fact I would say that for those who now offer a PAYE option (instead of pointing the contractors to an Umbrella Company) will have a new option to try and fleece their contractors even more. You could argue that there will be fewer contractors as many will be going permie but I have come around to the idea that these new IR35 laws will actually end up aiding the recruitment firms as many large organisations will simply employ inside ir35 contractors instead of permies going forward.

For me, apart from us contractors, the ones who will be greatly impacted are the accountants. I reckon many will simply go out of business.

[CheeseSlice]

They can always go back to their original jobs of used car salesman or real estate agent or selling double glazing

That's a step up from the sort I usually deal with. I see them more as sports direct assistants, mobile phone sales, barrow boys, or fresh out of school burger flippers

[CheeseSlice]

I slightly surprised that there's been so little discussion about the impact of the IR35 changes on rec. cons.

Maybe because its a contractor forum?

[BritishLad88]

I was just surprised nobody seemed interested.

Tbh i'm not that surprised. My place have a lot of permitractors. they say they don't care what the agencies are up to. All they care about is what is the best financial option for them going forward. only thinking about the finance but nothing else.

But yes, i believe you're spot on that agencies will find it tough to reinvent themselves. Some are already finding the SOW package model difficult simply not many clients are willing to engage in this model for whatever reasons. And turning themselves into a brolly like you say, it's hell of a tough competition indeed.

[Hapax]

It's hard to predict how every entity that is part of this whole supply chain will end up.

there would be ever more agents in the market, they probably just switch over to handle perm roles instead.
As for the agencies they belong to, well, smaller ones are likely going down the pan like you say hence, I see lot of them are fighting all corners to try to cling on to anything they can grab hold off.
Whilst, other agencies are becoming more creative and in seek for other possible solutions via SOW or even turning themselves into an Umbrella

The specialist contracting accountancy firms probably the biggest suffer but then again, they can become Umbrella too if they want to go down that route.

I agree that it's hard to predict what will happen.

However, the scenario of contractors as collateral damage in agencies imploding, struck me as sufficiently plausible to be worth discussing. I was just surprised nobody seemed interested.

I'm sure that agencies would love to reinvent themselves as you suggest but as I've already pointed out it's not clear that they will be able to do so.

Some could switch to handling permanent roles only but there aren't going to be that many permanent roles. I can't see it generating enough revenue to cover their costs without significant down sizing.

If they decide to supply temps or run umbrellas they face substantial competition from existing consultancies and the big four accountancy firms. Many of whom have already got there. Imagine you're a client deciding to buy a temp from say Accenture or Barrow-Boy and Bimboe recruitment consultants. Who would you choose as your supplier? Imagine you're an ex-contractor working as a temp. Who would you choose as your employer?

All in all I believe the future for many of these agencies is bleak.