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Market Update: Business Change and Transformation

​We saw a marked increase in hiring activity in H1 as clients accelerated their transformation programmes, with technology – and particularly digital transformation, ERP transformation and technology systems – the focus of many transformation agendas.

With remote working now a permanent fixture across industry sectors, this is likely to remain the case for the foreseeable future. Some businesses will need to reshape their operations in order to offer hybrid working, with many focusing on their operating model or people/organisation design. While the market is looking up, cost reduction remains a key consideration.

There’s been a slight preference for permanent hires, which is perhaps due to the changes to IR35 that came into force in April this year. Savvy organisations have used the delay caused by the pandemic to properly plan for the legislation – ensuring all contractors conform, reorganising their workforce, limiting the number of contractors on their books, or devising long term, cost-effective hiring plans.

However, contractors have remained understandably reluctant to take the tax hit and organisations have lost a lot of contracting talent, as well as experiencing difficulties in attracting the right skills for programme roles inside IR35. Some companies are responding by reducing the number of contractors they use or steering away from contractors entirely, instead offering roles on a fixed term contract, PAYE or statement of work basis.

Organisations’ key challenges in the second half of the year have been internal cost restrictions, availability of talent and ongoing uncertainty as a result of the pandemic. But with businesses needing to change the way they work in order to thrive in this new environment, and rising optimism as the markets start to open up, there has never been a better time for transformation.