UK Procurement & Supply Chain Recruitment Summer 2022

UK INTERIM PROCUREMENT AND SUPPLY CHAIN RECRUITMENT: MARKET UPDATE, SUMMER 2022

In recent weeks we have seen an increase in demand for Interim Procurement and Supply Chain specialists. Continuing supply chain issues globally and at home, high inflation, lower than predicted UK economic growth, Brexit and reduced business confidence (indicated by data from the ONS, CIPS and IMF, amongst others) are all cause for concern; however at this time labour supply remains significantly lower than available opportunities.

Long timescales to fill permanent vacancies; more ‘on hold’ projects coming on stream post pandemic, and employers fearing a recession, all support strong current demand for a knowledgeable and flexible Interim workforce that can ‘get things done’. Furthermore, new supplychain challenges, the demand for very specific ‘hard to find’ supply chain skills and Clients and Interims coming to terms with the IR35 Off Payroll regulations have all driven up demand for Interim Procurement and Supply Chain talent.

What’s in demand?

IT: 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 very 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 and Supply Chain specialists: Ongoing supply chain volatility as a result of China’s Covid-19 lockdown, Ukraine/Russian conflict, Brexit and ongoing fallout from the global pandemic; continues to focus the necessity for effective Logistic and Supply Chain strategy management. Securing supply tops the list (93%) as the greatest perceived risk to companies by Procurement Managers and Managing Directors, according to a recent study by the Consultancy BCG, a 15% rise on the previous years’ study. 

Vendor/Risk Management Specialists: Procurement specialist with solid Supplier Risk Management experience are 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; and have solid experience in applying digital solutions can make critical difference to an organisation’s success and reputation, these people are in very high demand.
As ever Contract and Supplier Managers with expertise in long term framework contracts applied in complicated cross-function environments will easily secure interesting interim roles.

Public Sector & Interim

Our feeling is that Interim activity in the Public Sector is showing signs of slowing; with the Government looking at cost cutting efficiencies, suggestions of major redundancies within the Civil Service, and with the latest government policy for Public Sector workers to move away from home working and back into their offices. In conjunction with the reduction of available ‘juicy consultancy projects’ derived from Pandemic, Test-and Trace and Brexit work; we are seeing a softening of overall demand for Interims from the public sector. When the civil service starts to implement significant staff reduction programmes, it is hard not see that this would be accompanies by a freeze on hirers on both permanent and interim sides, further reducing demand. However, our current government’s preference to choose external consultancy resourcing, suggests a lot of ‘unknowns’ for future interim demand patterns within the public sector.
 
IR35

IR35 Off-Payroll Legislation had undoubtedly stalled and supressed the Interim market over the last few years presenting significant challenges for both organisations and Interim Procurement Specialists. Two years down the road from implementation, we are seeing clients and interims more settled and knowledgeable to the changes in Off-Payroll legislation however it is still having a significant effect on demand and recruitment patterns.

Limited Company v Fixed Term Contract or Umbrella

The IR35 Off-Payroll legislation has been with us for a little while. 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. 
Many companies 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 mid-level roles secured on an Umbrella or Fixed Term Contract basis. 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, that will aid commitment and help secure positive project outcomes.
It remains the case for most Procurement and Supply Chain Interims, inside IR35 contracts are significantly less popular than outside ones, and a good deal of contractors will just say ‘no’ whatever the inside rate is!

What is happening with Rates?

As specialist permanent roles remain unfilled, demand for very specific skills increasing and underlying salary inflation, 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 no longer sustainable and interim rates, particular for contracts inside IR35 are increasing to ensure hirers secure the interim talent they need.
Rise in salaries for permanent staff has made day rates less attractive, particularly for those working inside IR35.
We have seen a couple of our clients that are engaging inside IR35, increase their day rates by 1.25% to compensate their interim employers increase in NI in April.
In a market where wage inflation is at a recent all-time high, we would suggest that organisations give careful consideration should be given to the Interim rates offered, ensuring comparability with permanent staff rates, to ensure attraction to the level of candidate required; and ideally engage on an outside IR35 basis.
We anticipate interim rates, particularly ‘inside’ rates, strengthening slightly as we move through the remaining year.

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’ pandemic, Brexit, war in Europe, global supply chain pressures, inflation and changing buying patterns. We see the underlying demand for talented Interim procurement and supply chain professionals remaining solid.
The Interim market is strengthening, and we expect to see this maintained (assuming 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 over a year in, has largely 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 managed to determine 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 both Permanent and Interim Procurement and Supply Chain recruitment, interim and permanent rates are strengthening ahead of average UK wage increases and Procurement and Supply Chain are now much more visible amongst the public and board level decision makers which puts 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 very competitive talent market. 

Beaumont Select Market Bulletin, June 2022

For more information please contact:

Oliver Lewsley

Recruitment Director

Tel: +44 (0)1403 248 448

Email: oliver@beselect.co.uk