A new European law about using contract workers comes into effect in the UK on 1 October 2011. If your project relies on temporary staff, freelance workers, or contractors, you may find that your project costs go up.
What is the new law about?
The Agency Workers Regulations entitles freelancers, consultants and other ‘agency’ staff to equal access to benefits and equal working conditions to those of permanent staff. That impacts everything from maternity pay to annual appraisals and the right to attend the Christmas party.
Employing a temporary worker on your project means that they will be entitled to information about job opportunities in the company, access to the canteen and to use the childcare facilities if these are provided by the company: basically, they are ‘equal’ to permanent employees. It is likely to take some time to establish how far this goes: will they be entitled to a car parking space, for example? Or luncheon vouchers? (Although I’m not sure if companies still give out luncheon vouchers!)
These benefits apply from the first day that the person takes a role with the company. There’s another level of benefit for contractors, though. This level kicks in after the person has been in post for 12 weeks. At this point they become entitled to the same basic working and employment conditions as a permanent staff member.
That means that contractors become entitled to the same working hours, rest breaks, equal pay, overtime payments and bonuses. They also become entitled to annual leave, with parity to what is on offer to the permanent staff. One quirk of the new law is that they can choose to take the time off or receive additional pay in lieu of the holiday time – not all companies offer permanent employees the opportunity to do this, instead opting for a ‘use it or lose it’ policy.
What is the impact on your project team?
Contractor rates are typically higher than permanent staff rates because contractors are currently not entitled to holiday pay, sickness absence pay or other benefits. With the introduction of the new law, you could have the opportunity to negotiate a reduction in contractor rates to take into effect the additional payments required for holiday entitlement.
Overall, costs for contractor staff could be higher, and you would be advised to review the provisions of the law and plan this into your budgets, especially if your project needs contractors on the team for over 12 weeks. You may even find it harder to get approval for temporary team members, because the terms of the new law make it less attractive to employee short term contractors.
Don’t forget the impact of all this on the permanent staff in your project team. Contractors are generally on high day rates – and now they are getting holiday pay? Managing the morale of your permanent team members when faced with high earning contractors could be tricky, so think about what you can do to address the balance. What else can you offer in terms of reward and recognition to support the permanent team members?
You may also find that permanent team members who have been thinking about contracting decide that this is the push they need to leave employment and set up on their own as a project management contractor.
First, find out if the rules apply to your company. Talk to your Human Resources department. This is the result of EU regulations, but even if you are working in a non-EU country, it could have an implication for your project if you have a European division. Normally, the rules of engagement in the hiring country apply so even if you are working elsewhere, team members based in the EU could be affected.
Arras People, the specialist project management recruitment company and the people behind How to Manage a Camel, have just released their latest Project Management Benchmark Report. This is an annual, ‘state of the industry’ UK project management study, and each year it includes information about salaries and corporate budgets. Here are some of the highlights from this latest report.
Training budgets cut
As well as looking at salary movements, the survey gathered data on salary amounts. The mode salary for project practitioners in the public sector is £30k to £40k: 36% of respondents fit in here. In the private sector the mode salary is the £40k to 350k band.
Part of a remuneration package is benefits: cycle hire scheme, childcare vouchers, season ticket loan, pension and so on. If you get these, consider yourself luck: 52% of employees reported that they receive no benefits.
The full 36-page Arras People Project Management Benchmark Report 2011 is available on line here.
Want a new job? The growth areas for new jobs are outsourcing, business transformation programmes, shared services and offshoring, according to Wellingtone Project Management.
Vince Hines from Wellingtone Project Management summarises the state of the PM recruitment world every so often, and his latest update shows that people are still hiring staff for project work. I’m not at all surprised by the outsourcing and offshoring comments – I spoke about the impact of the economic downturn and the increase we’d see in these types of projects at the APM conference in 2008.
Many large organizations kicked off business transformation efforts as a result of the recession, and they are now part way through their programmes. If your organization is doing this, and you have the chance to get involved, Hines recommends that this would be a “good career move”.
Cost reduction and efficiency improvements are, perhaps not surprisingly, strong areas for project growth... Equally other areas of particular interest within the project management industry include:
• Recognising need to improve project selection & Portfolio Management
However, Hines reports that confidence overall is reducing. August was a busy month, but things are tailing off now as we get closer to the end of the year. The total number of employers who have declared themselves out of the running for new hires through recruitment freezes has risen from 30% to 37%. Hines thinks that we’ll see this level of cautiousness for quite some time.
So, in a climate where we’re seeing more people put the brakes on recruiting at all, how can you make yourself as hire-able as possible? Companies have realised (finally!) that project selection is a key area in getting return on investment for their projects. Pick the right projects, and you’ll get the benefits. Pick any old project, and your company could spend a lot of money doing something that won’t really make that much difference. Project managers and PMO staff who understand the business case process, can identify benefits and compare projects will be in demand.
Hines also believes that companies want to manage their people more effectively. Project managers who can people-manage as well as project manage will also be sought after. Resource leveling and resource forecasting, combined with predicting how projects in the pipeline will change the demand for project and other staff in the future, are also key skills to highlight on your application.
Unsurprisingly, all this boils down to is that project managers who have kept up to date with the way in which the world has changed as a result of their not being lots of money to slosh around on failing projects, and who are highly skilled, personable, and able to help their businesses achieve the corporate objectives, will be targeted by recruiters. If that sounds like you, good luck with your job hunting – there’s a job out there for you. If it doesn’t sound like you, what are you going to do to improve your chances?
Want some help brushing up your project financial management skills? Then take the Learn Something New Team Challenge from Safari Books Online.
All you have to do is use one of their books to help you deliver a project of your choice. Send them the details of your project, the challenges you are facing and some information about the skills you need to do the project - project accounting, help with budgets or whatever. Then look up what you need to learn on Safari and do it! There are over 140 financial management books, and a load more on other topics.
The prize is an e-reader or a Starbucks espresso machine (I know which one I would rather have). The downside is that the e-reader prize is only for a maximum of a team of four, so don't get too excited about being able to dish out iPads to your entire department if you win.
I have used Safari online through a corporate subscription and it is very useful. In particular, when we needed to assess different software products in order to select the best fit for us, I found A Guide to Software Package Evaluation & Selection: The R2ISC Method by Nathan Hollander which was perfect for the job and a great help.
Essentially, Safari Books Online is an on-demand digital library that delivers thousands of books (and videos) from a variety of technology and business authors from massive publishing houses like O'Reilly and Microsoft. It's not the easiest thing to read management and technical books on a computer screen, but if you are scanning a contents page for the section that might just save your project, it's certainly worth a look.
I'm not affiliated with Safari in anyway, but I thought this competition was something useful to share - the closing date is 9 August, so get your skates on!
For every £1 spent on change management on large projects, organisations get a return of £6.50.