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.
Pedro Serrador presented yesterday at PMI Global Congress North America on how to become a program manager. There are many career advantages to program management – not least that program managers tend to earn more than project managers. So if you want to move into program management, here are Pedro’s tips.
“A program manager adds more value than just project managers,” said Pedro. He said there are eight principles to being a successful program manager, and shared these from Vincent J. Bilardo, Jr.:
Moving to a program manager role requires you to deliver the goods, he said. There might also be a case for upgrading your education, and learning from others. Pedro also said that prospective program managers should put themselves in a position where they can lead and mentor others, and especially learn to delegate appropriately. “Show that you are a leader, not just one of ten project managers in the group,” he added. Look for the opportunities that arrive and take them. Finally, act the role, he explained. “If you want to become a program manager, act like a program manager. Start to structure things like programs.” If you act like a program manager, your manager will see that you are capable of operating at that level.
“Often it is beneficial to move around,” he said, when he spoke about how to land that new program management job. That could mean moving to a new initiative or to a new company. He explained that outside CEO’s earn an average of 13% more than internal candidates. However, they fail 34% of the time, compared with only 24% of internal candidates, so there is something to be said for sticking with what you know. “Moving is riskier,” Pedro said.
Pedro had some tips for what to do when you get that first program, or you choose to structure your existing work as a program (even if you don’t yet have the title):
Pedro also said that senior managers spend more time planning their own time. “You help the projects managers get on the right track and then go on to something else,” he said. Factor that into your daily schedule and take the time to plan your day (and your schedule in general). It might seem like it takes a long time but it will be effective.
“A big part of your role is to let the stakeholders know the importance of your program and you need to be able to push to have obstacles removed,” he said. His final piece of advice was to have a 30 second status summary in meetings in case the executive you are presenting to gets called away. “Know to stop at yes,” he added.