IR35: The April Pivot Point

IR35 is coming to the Private Sector.

But in what shape?

The reason for asking is that the government has now said it will “review its implementation”.  Even before this additional layer of uncertainty, some organisations with large contract workforces demanded all Interims ‘flip’ into PAYE by March 2020. Such a decision, although a logistical and administrative nightmare, is simple and derisks the situation for businesses. However, whilst it increases the tax take for Government, it does not address the reason why there was an external, short term resource need in the first place. The change in legislation will not suddenly eradicate the demand for independent Interim Executives who can quickly provide Senior Leadership Teams with additional bandwidth, expertise and objectivity to deliver, for example, a major change and transformation programme. There will still be assignments clearly outside IR35 in their origination, content and delivery.  However, the contracts and how Interims engage with businesses will be different. It is this aspect that clients need to consider.

Having Interims integrated into your business via the provision of equipment, email, staff responsibility and anything that may describe them as a ‘disguised employee” will negate the independence and the considerable benefits they bring. Is the assignment controlled by the Client … is the assignment deliverable by the stated Interim or will a suitable substitute be acceptable … and is there a mutuality of obligation for employment to continue on an ongoing basis through an open ended contract and long notice period?

Norman Broadbent Interim Management is working with clients to review the structure and deliverables of all contracts. But whist there will be some assignments clearly caught within IR35, there will be others that are not and it’s important all parties recognise this. For assignments in process which run past March 31st 2020 and likely to qualify under the impending legislation, we are working on a variety of solutions. Thankfully, both Clients and Interims are being pragmatic. Clients in particular are mindful of the benefits a speedily introduced Interim can offer. These may be additional/new expertise to successfully execute a project or solve a problem, or the flexibility of only needing a set of skills for a qualified period of time.  These are just some of the reasons why the Interim Executive market continues to thrive.

However, the change in legislation has proven to be a real opportunity for organisations to review their short term/ temporary workforce. Out of the woodwork have come those contractors that were invisible, have never been included in any headcount, and have been with the organisation for many years.  Some may be in business critical positions where there is no obvious successor were they to leave due to IR35. For some companies (estimated at more than 80%), the review has yet to begin.  And once it starts to open up an organisation’s true exposure to contractors and the IR35 risks associated, the questions begin.

As a 40 year old Talent Advisory and Acquisition business, Norman Broadbent Group is supporting clients through this process. April 2020 is only a few months away and failure to act now could result in increased costs, loss of freelance professionals in critical roles, and significant disruption to your business, budget and people. The risks are high.  If contractors leave, a significant amount of IP may exit the business too. Existing staff may have to take on additional tasks, stretching an already maxed out workforce further. Some may be in business critical positions where there is no obvious successor …

As we approach April 2020, Norman Broadbent Group has devised a series of actions which can be deployed to help manage IR35 Risk. Examples include:

  • An end-to-end review of contract work force and solutions for mission critical contractors. Many organisations do not know the extent of their exposure and the impact to business
  • Research and Insight into how other organisations structure and shape areas such as Technology and how they are changing their Target Operating Models in light of pending legislation
  • Deploy Project Hires which will see the permanent recruitment of teams in functions where there were high contractor populations
  • Introduce experts in Outsourcing to advise on solutions and run RFI/RFP processes.

Whilst IR35 is a challenge, not only is it manageable, but it also creates opportunity.

Think of it as a ‘Pivot Point’. The legislation is an opportunity for companies to unemotionally review their contractors and press the Reset button.  In short, it enables companies to review current and future use of contractors and to design the optimal people solution combining short term resource, Fixed Term contracts and permanent resource.

If you would like to confidentially discuss how Norman Broadbent Group could help you overcome your business or people challenges, please contact, Angela Hickmore, on 07483 015 584 or via angela.hickmore@normanbroadbentsolutions.com

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Norman Broadbents new partnership

 

Norman Broadbent Group partners with UN Women UK

Leading London-listed Professional Services firm, The Norman Broadbent Group plc, has entered into a partnership with UN Women UK, the UK arm of the UN agency for gender equality, to support the vision of a more equal, inclusive world – both in the workplace, and in communities across the globe. Norman Broadbent is the first leadership advisory firm in the world to partner with UN Women UK. The partnership will leverage the firm’s Inclusion and Diversity solutions which are designed to help businesses create inclusive working environments and identify, attract and retain the best and most diverse leadership to support equality and commercial goals.

Norman Broadbent’s Group CEO, Mike Brennan, said: “Inclusion and Diversity is part of our DNA underpinning much of our Client work. We are delighted to have been invited to partner with UN Women UK to help further the equality agenda and drive greater inclusivity within business. It is widely recognised that organisations with a more inclusive and diverse working environment are not only doing the right thing, but are more successful. We hope our partnership will help accelerate and broaden workforce inclusivity and diversity at all levels. This partnership is not only an important opportunity for UN Women UK and Norman Broadbent, but also for the markets we serve. This news comes only a matter of weeks after we were recognised by The Hampton-Alexander Review for our work in this space. This partnership is a huge honour for us and we look forward to working with our new partners at UN Women UK.”

Trustee of UN Women UK, Carol Rosati OBE, said: ”We still live in a world in which only 6% of the Fortune 500 CEOs are women. Not only does this mean that women’s voices are not properly represented in companies around the world, it also means that young girls have fewer role models inspiring them to be future leaders. This needs to change. UN Women UK are committed to working with governments, businesses and all women to create more diverse, inclusive workplaces – and we look forward to working with The Norman Broadbent Group to work towards this important goal.”


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About The Norman Broadbent Group: Norman Broadbent is a leading Professional Services firm offering a diversified portfolio of integrated Leadership Acquisition & Advisory Services (Board & Leadership Search, Senior Interim Management, Research & Insight, Leadership Consulting & Assessment, and executive level Talent Solutions). Quoted on the London Stock Exchange, it is backed by investors including Judith MacKenzie at Downing Capital LLP, Gervais Williams at Miton PLC, Jon Moulton, Pierce Casey, and Ennismore.

 

About UN Women UK: UN Women is the global UN agency for gender equality and the empowerment of women and girls. Founded in 2010, UN Women works at every level to drive change: from working with governments to design inclusive policies to delivering programmes on the ground for women entrepreneurs and survivors of violence. UN Women UK works to advance this agenda in the UK, working with leading partners such as Norman Broadbent Group, to give everyone the right to safety, voice and a choice. Only by working together, can we truly change the way the world works for women.

Contact Information

The Norman Broadbent Group plc

Mike Brennan T: +44 (0) 207 484 0000 or mike.brennan@normanbroadbent.com

 

UN Women UK

Carol Rosati OBE: carol.rosati@unwomenuk.org

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“It’s all in the mind (set)…”

“There are two types of people in this world…” is a common opening line for many jokes and internet memes. However, it was over 30 years ago that Carol Dweck identified a stark difference in resilience between groups of her students. Some were unable to deal with failure – such as on a test – while others rebounded and came back stronger. So distinct was the difference that she was able to split them into two groups – those with a ‘fixed mindset’, and those who presented what she termed the ‘growth mindset’.

Individuals with a fixed mindset often hold a binary view of the world. For example, they may not believe in the ability to grow or learn, and therefore measure their progress in terms of success or failure. This may lead them to avoid challenges and perceive obstacles as insurmountable. Such a mindset results in individuals often giving up on a challenging task because (“it cannot be done” or “I can’t do that”).

In contrast, those with a  ‘growth mindset’ embrace learning experiences no matter how uncomfortable, are more likely to embrace challenge, rebound from an initial failure, and believe perseverance is the key to “getting it done”.

It was immediately obvious to Dweck that these two different mindsets would have an impact on educational outcomes – after all, a student who fails an exam and redoubles their efforts to succeed next term is far more likely to achieve success than one who decides the course is ‘too hard’, and drops out.  In recent years these implications have also been seen to carry through into the world of work and business.

Some of the most successful individuals and businesses in the world clearly demonstrate a growth mindset. Microsoft CEO Satya Nadella engineered a dramatic cultural shift across the whole business from one of hierarchy and attrition to one of exploration, collaboration and learning since his arrival in 2014. It isn’t a coincidence that the business has tripled in value since then, and many other leaders are understanding the benefits of adopting growth mindsets – and encouraging their teams to do the same.

With a growth mindset, learning something new, and stretching oneself are highly valued. As a result, people with growth mindsets are often able to explore issues and engage with topics and other individuals on a deeper and more meaningful level. This has been found to reduce anxiety in individuals, as well as bringing benefits from developing better rapport with colleagues and clients. A growth mindset sweeps away negativity, turns setbacks and disappointments into learning experiences, and celebrates and learns from the success of others. Work cultures which embrace growth mindsets often also show stronger support for risk taking, as there is no need to ‘play the blame game’ if a risk doesn’t pay off.

Unlike the joke, it turns out that there aren’t really only two kinds of people in the world. The path between having a fixed and growth mindset is a continuum, which means leaders and individuals can take small steps to nudge their teams and businesses towards embracing a growth mindset. Embracing challenges, taking a collaborative and collegiate approach to work will encourage the growth mindset to trickle down. Celebrating success as a team, engaging in regular improvement feedback (not just praise) is also crucial. Taking these small steps can encourage everyone, from the top down, to embrace a growth mindset, which might just be the key to unlock their personal – and professional – potential.

If you’d like to learn more about the Norman Broadbent Group, please contact our Group CEO, Mike Brennan, on 020 7484 0000 or via mike.brennan@normanbroadbent.com

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Insurance Update Trends in Digital

The global insurance market is in the midst of a game-changing course correction that will re-define ‘business as usual.’  A ‘digital first’ urgency is sweeping across the industry driven by a new generation of consumers, data, automation and Artificial Intelligence. Being in constant dialogue with decision-makers across the industry, Norman Broadbent has pieced together a summary of some of the top trends shaping the insurance industry, and outlined how digital technologies are driving irreversible change.

Artificial Intelligence (AI) and Automation in Claims

Robotics and AI will be at the centre of change in the Insurance space. This is driven by new data channels, better data processing capabilities, and advances in AI algorithms. For example, InsurTech company Lemonade’s business model deploys AI and behavioural economics as core elements. While AI eliminates brokers and paperwork, its behavioural economics capabilities minimise fraud, leading to reduced time, effort and costs. Bots will become mainstream in front and back-office to automate policy servicing and claims management for faster and more personalised customer service. Lemonade’s claims bot Jim assesses and pays out property claims within three seconds! AI and automation will profoundly affect and improve business outcomes in customer experience, cost optimisation, operational efficiencies, market competitiveness and newer business models.

Personalised Products and Pricing

The digital economy will make usage-based, on-demand and ‘all-in-one’ insurance lifestyle products more relevant. Customers will prefer personalised insurance covers instead of the one-size-fits-all products currently available.  Flexible coverage options, micro insurance and peer-to-peer insurance will become viable options in the long run. Reinsurers will provide risk capital directly to digital brands, and regulatory frameworks will accommodate shorter value chains.  Lifestyle apps will re-imagine the insurer-insured relationships. Application Programming Interfaces (APIs) will enable the creation of insights-driven offerings as they integrate data from multiple sources. Deeper understanding of customer behaviours will lead to more accurate risk assessments, personalised premiums and value on a sustainable basis for better customer experience and brand loyalty, plus reduced false claims. Premiums will become highly personalised, enabled by new sources of tech-enabled data such as Internet of Things, mobile-enabled InsurTech apps and wearables. With the connected devices market growing strongly, insurers will be able to extract real-time and accurate data on the loss exposure of individual consumers. This will help them proactively respond with timely and highly personalised interventions. For example, a UK-based insurance company leverages predictive analytics to model complex customer behaviour, achieve enhanced pricing accuracy and significantly reduce decision time.

InsurTech Partnerships

As highlighted in the recent Deloitte’s Industry Survey, A Demanding Future, incumbent firms can no longer rely on organic growth or internal innovation. This in turn will push businesses towards greater collaboration with innovative start-ups/InsurTechs, and drive increased M&A activity. InsurTech firms have been showing significant growth in the areas of motor, home and cyber insurance. Such strong growth will stimulate traditional insurers to either acquire technology capabilities or partner with InsurTech companies. With an increasing demand for innovative products and services from millennials, such collaboration will become critical.

Norman Broadbent Group provides a range of Talent Acquisition & Advisory Services to the Insurance sector. This depth of sector expertise and a successful track record in supporting digital transformation makes us the partner of choice for many businesses.  If you’d like to hear more about our track record, or to discuss a specific assignment, please contact David Cooper, Director and Head of Insurance, via david.cooper@normanbroadbent.com or on +44 (0)20 7484 0110.

 

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Identifying long-term talent in the UK water sector

With an upcoming election potentially dictating radical changes, it’s an unsettling time in the UK water sector as we approach AMP7. The potential of nationalisation, aligned with competition for talent across other major infrastructure sectors (think rail, airports and energy) makes it difficult to know what people capabilities are needed, and when.

Searching for senior managers and executives – It goes without saying that unsettling times generally lead to unexpected changes on leadership teams. It’s therefore crucial to expect the unexpected, and have a plan in place for when it does. Succession planning is key, but sometimes water companies don’t have big budgets to run large-scale strategic talent planning initiatives; sometimes, you have to be reactive and recruit people on a case-by-case basis.

If the need arises to run a search across the external market, you must prioritise your long-term business requirements. It takes a methodical and structured approach to ensure a search is run effectively and to feel confident that you have identified the best possible candidate. Cultural fit, personality, diversity, technical capability, salary expectation and availability are all equally important factors, and having a partner who can assess all of these factors is crucial. This is a professional service which is designed to facilitate a long-term, value-adding hire.

Investing in a full process is essential; Imagine the long-term damage it could cause to your business if you accelerate the initial search process too quickly, resulting in a hire who has the potential to disrupt your internal teams and miss opportunities to maximise operational and commercial success. On the flip side, imagine you had invested an extra 3 or 4 weeks to turn over every stone throughout the search process and identify a candidate who perhaps required an extra £20k in their basic salary, but directly or indirectly delivered an additional £500k of commercial value to the business.

On some occasions, you may not be sure whether the business is ready to embark on a full search process; nevertheless, you require an understanding of who might be available or interested in a potentially high-profile role on the ExCo. The water industry is fairly incestuous, so when the likely candidate is sitting in one of your competitor or supplier organisations, this must be treated with the utmost sensitivity and confidentiality. Running pre-search due-diligence is an effective way to gather an initial understanding of the external market and appetite of candidates to consider a move, without necessarily advertising your own company name or a specific job profile in the external market. This de-risks the hiring process and again, enables a more strategic mindset when the need to hire does arise.

“Out of sector” talent

This is a difficult one, as there are many occasions where specific water sector experience is a must-have. That being said, it would be narrow minded to think that this is always the case. My advice is to ensure you take a balanced approach to the make-up of a whole team, rather than focusing on the individual hire. Take asset management as an example; if you have a Head of AM with 25 years’ experience in the water sector, and a generally strong sector competence within the team beneath, this would be a prime opportunity to calculate where you could implement 2 or 3 strategic hires from other asset-based industries who can offer a different mindset and set of experiences that you would never gain from another water specialist. However, if you had a diverse team of Asset Managers from different sectors and unexpectedly lost the Head of this function, it might make most sense to do a targeted search to replace this individual with a water sector expert to ensure the competency level remains balanced in the team.

Pipelining for talent – The water industry is just one example of a sector where the same faces have circled around the same companies for years, and sometimes decades. It is also an industry which has found it difficult to engage and retain the best talent. Due to the cyclical nature of the industry’s capital programmes, it is likely to see a huge thrust of activity at the start of each AMP which excites and engages employees. However, 3 or 4 years down the line when capital has been allocated and projects are in full flow, some employees may start to think “what next?” and are at risk of being enticed by another exciting opportunity in an alternative company or sector.

We know it’s always difficult to find good middle management in areas like engineering, operations, asset management and project management, so how can you be more proactive to ensure you’re prepared for the inevitable fluctuations in your workforce?

Developing pipelines of talent aligned with core functions is an effective way of ensuring you know where the best talent is, and how easy that talent is to access. This facilitates a more strategic mindset around who should be hired and when, whilst enabling an efficient hiring process once you have made the decision to bring a new face into the business. Additionally, there is a back-up plan should you lose someone unexpectedly from one of your critical business functions.

Pipelines of talent can also be aligned to specific succession planning requirements; for instance, do you know that one of your executives will retire in 2 years’ time? Rather than reactively recruiting, there is an opportunity to run the exploratory market mapping and initial engagement in advance to ensure you have planned effectively for future changes and can react accordingly once the time comes.

In summary, senior level recruitment in the water sector (or any other energy/utility sector for that matter) doesn’t always have to be reactive, but when it does, you can prepare yourself in advance to ensure the hiring process doesn’t become an overwhelming hindrance. Each business has different capabilities and requirements, so a bespoke approach to your long-term talent planning is essential. It requires strategic thinking, and a genuine recognition that without the right people, the business will not perform to its full potential and customers will ultimately feel the impact.

Norman Broadbent Group provides a range of Talent Acquisition & Advisory Services to the water sector. This depth of sector expertise and successful track record makes us the partner of choice for many businesses.  If you’d like to hear more about our track record, or to discuss a specific assignment, please contact Chris Smith via chris.smith@normanbroadbentsolutions.com or on +44 (0)20 7484 00000.

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Stop Wasting Money …

How often have you been involved in hiring a senior executive when it only becomes clear mid-way through the (expensive) executive search what is really required?

You aren’t alone as research shows 37% of all executive searches fail.  That is a lot of wasted time, money and effort for no return.

Why is this? Selection processes are becoming more sophisticated, psychometric tools are widely available to assess fit and networks are easier to access for sourcing, proof of experience and referencing. Let us use Occam’s Razor – the simplest answer is often correct. Hiring requirements are often unrealistic relative to available talent (bundling diversity with high levels of functional experience and exposure to digitalised markets for example); hiring priorities vary between stakeholders, only to be exposed when decisions are required post interview; compensation budgets do not meet market expectations etc.

So what’s the answer? You would hope your retained head-hunter would provide you with the market counsel that would steer you from these hazards. In reality, the hazards are often only visible when collision is inevitable. When a search is commissioned, there is usually a focus on time. The default reaction is to recruit. But what are you hiring, from where…and why would they come to you? In the same way due diligence is performed pre-acquisition to de-risk mergers, why not take a look at the landscape around you. Test the water, undertake research on competitors and the more creative places your newest leadership hires will be sitting. Build a picture of their skills, costs, motivations and perceptions of you. Then decide what you need, what you’d like, and what you need to do to attract. We call this Pre-Search Due Diligence.

A recent Forbes study claimed that a failed Executive Search could cost a company up to $500,000. It’s not just the cost of the search itself, but the opportunity cost of delayed leadership in critical roles. And this doesn’t take into account the reputational damage to your EVP of an inconclusive or meandering search process.

At Norman Broadbent we help companies across all sectors where there is some concern about the finer details of the requirements for a new hire, or the options for a new role, by undertaking market, business and leadership intelligence into defined market areas. With this type of report in hand, our clients get a view on how realistic their expectations are, with independent evidence which can be presented to the Board and other key stakeholders. The approach is anonymous, and provides the opportunity to pause and reflect on what is really needed, de-risking and futureproofing the hire. The cost saving is significant, and the output provides the foundations of your search, would you go that route. Ultimately, it enables realistic and unbiased expectations for both candidate and client from the start.

One of the most powerful things a headhunter can say in response to ‘Does this person exist?’: ‘I don’t know, let’s find out’. If you hear a different answer, beware.

If you would like to discuss Norman Broadbent’s Pre-Search Due Diligence approach in more detail please contact Jacqui Pinnell, Group head of Research (Jacqui.pinnell@normanbroadbent.com) or Ed Bransby-Zachary, Managing Director Client Services (ed.bransby-zachary@normanbroadbent.com).

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