Choosing the right supplier post IR35 reform

With the latest reforms to IR35 having come into effect on April 6th, public sector bodies (PSBs) are facing the mounting challenge of keeping teams filled. This, coupled with the Civil Service-wide recruitment freeze introduced in 2010, is a particular problem for PSBs tasked with delivering digital projects, where software engineering teams were once largely made up of contractors who now have an incentive to look elsewhere for work. The reforms are here to stay, so what options do PSBs have in terms of continuing to deliver good digital products?

The Story So Far

Prior to the IR35 reforms, the recruitment freeze meant that PSBs couldn't take on new employees. However, there weren't such restrictions on bringing in contractors. Hiring an employee means incurring a certain amount of cost and risk, both in terms of onboarding them and hoping that they're a good fit for the organisation in the long term. Contractors don't come with that baggage, in the sense that they're typically not given the same benefits as an employee, and contracts can be as short as a couple of months.

The IR35 reforms came about as a reaction to the increasing number of contractors who were having their contracts continually renewed, to the point that they were essentially full time employees who had the advantage of being able to pay less tax through various means. With IR35, end clients now decide how a long term contractor is taxed. For such contractors, that's not an appealing idea, resulting in many contractors pursuing new work.

Now what?

PSBs delivering digital products have the unenviable task of figuring out how to get a skilled team working on those products again. The recruitment freeze makes it difficult to bring new people in for the long term, and IR35 means skilled lone contractors will, at best, be around for a matter of a few short months. This leads to high team turnover, and such instability is a danger to software projects – without a consistent driving force leading development, software projects can become unwieldy, difficult to understand and, worse, much more costly to maintain and evolve in the long term.

One option is to bring in a dedicated software supplier. Software suppliers provide teams of skilled engineers who can deliver high quality projects, whilst building and maintaining a successful working relationship. The question is: which software supplier is right for you?

Choosing the right supplier

Deciding which software supplier to go for is not a decision to make lightly. Ideally, you'll be working with the supplier you choose for months, possibly years. The worst case scenario is working with one who simply isn't a good fit. Such a situation may end up costing you more money and time in the long term, as you seek to replace them and repair any damage done to the project.

It's crucial to find a supplier that you, to the best of your ability, are able to discern will be a benefit to your project and wider organisation. We believe there are a number of key areas to look at, to give you the best sense of what it will be like to work with a given supplier:

Location

Though there's often a lower upfront cost, we've spoken at length about the challenges of offshoring development. From differing working hours to problems in maintaining a good line of communication in order to ensure a consistently high level of quality, keeping the development of a project close has many benefits.

With a local supplier, though there is admittedly likely to be a difference in cost, there are several benefits. For one, having them nearby makes it infinitely easier to feel them out over a period of time. As you're not incurring significant travel costs, you're able to make repeated visits to their offices, and vice versa, to really get a sense of the people you may end up working with.

A good supplier will also allow and even encourage their team to work on site with you. This gives you the chance to strengthen your relationship with the supplier further, on an individual scale. For the team, it gives them the opportunity to become properly immersed in your organisation's culture, and become even more invested in the work they're doing.

Questions to consider:

  • Taking geographic distance into account, how simple is it to communicate with the supplier?
  • Does the supplier endorse colocation, as a means to building a stronger working relationship?

Communication

Having a supplier close by means it ought never to be difficult to get real face time with the team building your project. Even so, you need to be sure a prospective supplier can communicate well., from initial meetings through to development and, ultimately, completion of the project and beyond. For instance, if you're working in different locations, you need to know you can quickly get hold of them via email, a phone call, or a video chat.

Look for a supplier who places an emphasis on collaboration. You'll have goals for the project in mind, but a good supplier will discuss those goals with you and constantly try to find ways to improve upon them for the benefit of everyone involved. They'll include you in planning meetings to capture as many requirements as possible, and they'll regularly, every week or two, showcase the work they're doing to your organisation's stakeholders. You'll be able to give feedback during these sessions, and the supplier should be willing to discuss any concerns you have.

Questions to consider:

  • How easy is it to get in touch with the supplier? Are they quick to respond?
  • How well does the supplier communicate with you during initial meetings?
  • How do the suppliers intend to keep you involved and abreast of progress during development?

Team consistency

As mentioned earlier, keeping a team consistent on the development of a digital product is vital to its success. When the majority of the team have been involved from the beginning of the project, there is a clear, shared goal that is easily understood by each member.

When bringing in a third party supplier, look for teams who can guarantee a sense of continuity throughout the engagement. Though you're working with a company, you'll ultimately be building relationships with the individuals within, and you need to know those individuals won't be rotated off to help their company deal with a new project.

Questions to consider:

  • Can the supplier guarantee you'll be working with the same people throughout the engagement?
  • Is the supplier keen to build a strong relationship with your organisation, or do they just want another project on their books?

Experience working with large organisations

Digital transformation is currently a priority for the Civil Service, with the aim being to build services that are simple to use. However, the bigger the organisation, the harder it is to introduce the changes required to build such services. Agile practices can help, but how do you convince your team to adopt them?

Any experienced supplier will be able to guide you towards the practices that will benefit your organisation most. There is a lot of material on the subject of Agile, but it's not a one-size-fits-all methodology so, for it to succeed in your organisation, it needs to be tailored to your needs.

In smaller organisations, this is a lot simpler. For large organisations, it's a lot trickier as it will inevitably affect many more people and established processes, and could become quite political. You need to know that the supplier you choose is equipped to deal with this level of responsibility, that they've helped brought about such change in organisations of a similar size.

Questions to consider:

  • Does the supplier have experience working with large organisations?
  • Can the supplier help your organisation adopt agile practices?

The IR35 reform has presented new, large obstacles for PSBs building digital products to overcome, but they're not insurmountable. Small in-house teams and a rotating roster of short term contractor may get the job done, but the risk of producing something suboptimal is high in such situations.

Though just one solution, working with a good software supplier ensures that the product being built has a great team developing and supporting it. Take the time to get to know potential candidates, they'll be working with you for a long time and you need to know it's going to be a productive and successful relationship.

About the Author

Scott Mason

Former Software Engineer at Made Tech. Probably listening to soundtracks right now.

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