Advisory - Restructuring Senior

** DEFAULT postresults.summarylabel - en-GB **

Most established organisations will have experienced difficult periods in the past. Businesses often go through peaks and troughs of activity, with profit and margin fluctuating and external conditions and pressures impacting the success of even the most well-prepared business. In fact, nearly 70% of business leaders say they’ve experienced at least one corporate crisis in the five years leading to 2019, according to PwC’s 2019 Global Crisis Survey. Despite this, it’s safe to say that most businesses around the world will never have gone through anything remotely like the current Covid-19 crisis. With 94% of the Fortune 1000 reporting Covid-19 disruptions and one-fifth of UK workers furloughed, it’s clear that Coronavirus is well and truly affecting workplaces and the wider economy. For business leaders, responding to and communicating the impacts of the virus to employees, stakeholders, clients and the wider public can be fraught with challenges, particularly for those who are inexperienced in crisis communications. There are, however, some simple strategies you can follow to help navigate your business through this time. Here is our top crisis management advice for business leaders:  Communicate quickly and clearly  During a crisis, unclear and inconsistent information can lead to people feeling unsure and demanding transparency and guidance. The influx of news, opinion and rumours around Covid-19 means many of us are experiencing information overload, but still aren’t sure what to believe and who to trust. That presents a clear opportunity for business leaders to practice effective crisis communication. According to McKinsey, good crisis communicators do the following:  Provide a variety of information that responds to the needs of listeners, whether that’s business updates, reassurances around job safety or useful tools to support mental wellbeing.  Communicate clearly, frequently. Repeat key messages to ensure they are absorbed.  Be truthful, show vulnerability and promote transparency to help build loyalty. Sometimes you will have to deliver difficult messages, but doing so openly and with empathy will help your leadership.  Encourage resilience, accentuate positive outcomes and messages and promote communal bonds.  Help people to understand. A clear (and clearly communicated) vision or mantra on what the business is doing and what the outcomes will be can help people to see beyond the chaos and focus on the task at hand.  Reach out for support  Crisis management and communication is usually not the responsibility of just one person. While there is typically someone who leads the business through these times – usually the CEO – PwC research shows us that ownership of crises tends to be shared across functions including legal, risk and IT, with roles such as preparedness, response, communications and recovery spread across many business units. What’s more, this responsibility is often shared with external parties, with 74% of business leaders seeking help during or after their most serious crisis, according to PwC.  Consider establishing a Coronavirus crisis team within your own workforce, made up of team members from across the business to contribute to everything from making key business decisions to communicating messages, encouraging workforce socialisation and sharing helpful resources. For more tips and insights into how to handle crisis management, take a look at resources from the Institute of Internal Communication on 'Coronvirus advice for internal communicators', and PwC's 'four essential crisis management lessons'. Plan for the future  As “real life” feels indefinitely suspended and the world’s attention seems to permanently be on Covid-19, it can be easy to develop tunnel vision and focus only on the here and now. And while business leaders should certainly be in the moment to navigate the seemingly endless questions and challenges posed by Coronavirus, it’s critical to also be looking ahead to ensure that the decisions you make now don’t have a negative impact in the future.  We don’t know what a post-Covid-19 business landscape might look like, but savvy business leaders will be factoring in enhanced technological solutions to allow for more remote working as well as looking at options for local suppliers and solutions. With billions of people living in closed-border countries - and the vast majority of workers residing in countries that have strict barriers to entry - we may see changes to everything from workforce mobilisation to supply chains. Businesses that utilise cloud systems, video interviewing software, digital conference calling programmes and other new technologies may find themselves with an advantage as we ease back into some sense of normality. Staffing during and after the Covid-19 crisis should be a major part of any business leaders’ strategy. Many businesses are now being faced with cost-cutting exercises that are leading to furlough and redundancies, which can help struggling businesses stay afloat to continue operations post-Covid-19. Any long-term crisis management strategy should include detail on building your workforce back up, whether that’s through bringing employees back off furlough, taking on contract workers or hiring new employees to add value as you build your business back up. Whichever your strategy, a specialist recruitment agency like Marks Sattin can help you to achieve this objective. At Marks Sattin, we’re working hard to ensure professionals and organisations in our key markets stay connected and have access to the best opportunities. Stay up to date with our latest news and industry insights in our blog section, or contact us to find out more about working together.  

** DEFAULT postresults.summarylabel - en-GB **

Employees in the United Kingdom can be categorised as full-time, part-time, casual, freelance and contract workers, with the self-employed bracket now making up 15% of the entire working population. The number of self-employed workers jumped from 3.3 million in 2001 to 4.8 million in 2017, with a corresponding fall in the unemployment rate showing the overall boost in jobs growth from the rise in self-employment. However, the attractive market for freelancers and contractors has been hit with some uncertainty in recent times, thanks largely to the 2018 Autumn Budget’s announcement of IR35 tax reforms. Here’s what the new IR35 rules could mean for you and your business: What is IR35? IR35 is a piece of legislation originally introduced to the UK in 1999. Its purpose is to differentiate between those workers who operate as genuine contractors and those who work as ‘disguised’ employees to avoid paying tax. It came about to challenge contractors who were taking advantage of the tax efficiencies of working through a limited company, with the aim of defending both the Exchequer from lost taxes and protecting workers’ rights from unscrupulous employees. However, the IR35 has proven to be ambiguous for many, with some contractors taking advantage of loopholes and a lack of clarity. Hence, the new IR35 rules aim to tighten up the contractor market and ensure tax avoidance loopholes are closed. How does IR35 work? There are three principles that can help to determine employment status and whether a contractor falls inside or outside IR35: Control (the degree of control the client has over the work a contractor does and how and when they do it) Substitution (whether the worker needs to do the work themselves or if they could send a substitute in their place) Mutuality of obligation (whether the employer is obliged to offer work and the contractor is obliged to accept it). Additionally, the contract type, provision of equipment and whether a worker is “part and parcel” of a business can all help to determine whether someone falls inside or outside IR35. The change in IR35 rules shifts the responsibility to determine tax status away from the contractor and onto the business that takes them on. Until now, contractors have been able to self-determine their status, however as of April 2020, when the new rules come into effect for the private sector, companies will risk being fined if they don’t make the correct assessment.  How will IR35 impact contract workers? It’s anticipated that many contract workers who have been enjoying the tax benefits of working outside IR35 will fall under the legislation when employers are tasked with determining their status. This will see more contractors having tax and National Insurance contributions deducted from their pay. However, if you operate as a legitimate small business and are determined to work outside of IR35, you will not be affected by the rule changes. How will IR35 impact employers? The major change for businesses is that they will now be responsible for determining the IR35 status of any contractor working for the company. The new rules will only apply to medium and large sized businesses, so contractors who work for small businesses can continue to set their own IR35 statuses. Those businesses that the IR35 rule changes do apply to will face paying back taxes and fines should they be found to be noncompliant. What should I do to prepare for IR35? Contractors may wish to speak to an accountant or personal finance expert to determine whether IR35 will impact them and if a move to permanent work may prove to be more beneficial after the rules come into effect. For many, contracting will remain appealing regardless of increased tax responsibilities, however it’s important to factor in any change in income that IR35 may bring about. Businesses are being warned not to make blanket assessments that cover all their contractors, as this can leave workers without a fair assessment and risk them paying unnecessary taxes without equivalent employment rights. Instead, businesses should consider IR35 status on a case-by-case basis or they may risk losing out on top talent. The HMRC has released a consultation document for businesses to prepare for the IR35 changes, recommending identifying and reviewing current contract workforce status and putting processes in place for taking on new workers. At Marks Sattin, we pride ourselves on keeping abreast of all industry legislation, updates and changes that affect our candidates and clients. Speak with us about how we can help you. References: https://www.bbc.co.uk/news/business-44887623 https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2018-02-07 https://www.contractorcalculator.co.uk/what_is_ir35.aspx https://www.axa.co.uk/business-insurance/business-guardian-angel/how-ir35-changes-will-affect-freelancers-and-self-employed-contractors/ https://www.telegraph.co.uk/business/ir35-rules/new-contractor-tax/ https://www.telegraph.co.uk/business/ir35-rules/how-will-new-rules-impact-business/ HMRC consultation document