In any procurement career there are times we crave a new challenge or a different role. Increasing numbers are choosing to strike out alone as contractors or consultants. But is it right for all? SM asks those who know
For more than 30 years David Picton woke up, got ready for work, set off on his commute and arrived at his full-time supply chain role ready for the day ahead. Until one morning in February last year, it stopped. Picton had become his own boss, or in today’s parlance, he had joined the gig economy. It was the first day of a new life.
“I felt liberated. I felt absolutely terrified. I felt rejuvenated. Anything was possible. I could write a book. I could give a keynote. You feel it in your chest and in your heart. It’s an emotional reaction,” he says.
His time in full-time director roles at major organisations such as the UK Royal Air Force, Motorola Mobility, BSkyB and, most recently, Carillion – where he had helped with transition arrangements – was over. He was a free agent, and part of a growing trend to become self-employed. The Office for National Statistics’ latest figures show that 4.8 million people in the UK are self-employed – that’s just over 15% of all people in work. And self-employment accounts for more than 40% of the total increase in employment in the last 10 years.
Recruiter Hays says the market for the self-employed in procurement is a buoyant one: its research finds 40% of employers planning to recruit interim staff over the next year. “Some 68% of organisations expect there to be a shortage of permanent applicants in the next 12 months,” explains Scott Dance, director, Hays Procurement & Supply Chain. “There is a huge skills shortage across all sectors and disciplines. Employers often need people because they cannot fill voids.”
Research for the 2018 CIPS/Hays Procurement Salary Guide and Insights found the most common assignment for interims to be change and transformation projects, at 31%. However, there has also been an increase in interims in a number of roles, with a 5% rise in generalist procurement role/sickness/maternity cover; 5% rise in strategic sourcing exercise, which could be due to a Brexit-related need for supplier re-evaluation in the light of currency and import/export issues; and a 3% increase in end-of-tender process.
So the demand is there. But giving up the comparative safety of a full-time role to join the ranks of the self-employed is a big step. Heidi St Hill started contracting last year, having worked in procurement for 20 years, predominantly in a category management capacity in businesses such as Marks & Spencer, Reuters and Pentland Brand. She observes: “The move can be challenging. The pace and environment change can be difficult.”
If you’re thinking of taking the plunge and becoming your own boss, here’s the SM guide to joining the gig economy.
1. Why do it?
There are many reasons why people leave full-time work but several consistently pop up: autonomy and control; flexibility and work-life balance, and variety. For St Hill, leaving bureaucracy and boredom behind and being able to make a difference straight away were key reasons for her decision to set up on her own.
“I realised what I enjoyed doing was delivery, and what better way to ensure you deliver and create value every day than working for yourself?” she says. “You can choose jobs and have the flexibility of time off between jobs. There’s more control, accountability and responsibility.”
While St Hill made a conscious choice to work for herself, Amanda Earnshaw-Darg was thrown into it after being made redundant from her role as head of procurement at insurance giant RSA. “It was quite scary. But then someone in my network asked me to do some interim work and it seemed a convenient answer. Now I’ve taken the decision to get another contracted role.”
Having worked in financial services most of her procurement career, she has been supporting property firm JLL with its procurement and bid strategy, and is about to move to The Body Shop to head up indirect procurement. She believes this variety would not have been on offer had she stayed permanent.
2. What skills and traits do you need?
The number one skill you need is to be able to hit the ground running. There is no cosy two-week bedding-in period. As Earnshaw-Darg says: “You need the ability to rock up and just get on with it. No one is going to supervise you as a contractor – you are expected to find your place in the team really quickly and be seen to add value straight away.”
St Hill agrees. “Ultimately your reputation is on the line,” she says. “If you don’t deliver, then you won’t get another job. What you put in front of your client has to be bang-on. So, you need to be a self-starter, able to go out, build relationships and find and absorb the information you need quickly.”
“Listening skills are paramount,” adds Dance. “Normally an interim is brought in because there is some sort of problem. You need to be empathetic and show you are there to solve problems rather than to break things up.”
Earnshaw-Darg believes enthusiasm is important. “You have to be upbeat, a glass-half-full type of person able to do whatever the client wants. You must also be willing to be independent. You are a temporary and expensive asset and need to get people to support your agenda very quickly. You are never really part of the team as your agenda is slightly different and you will be leaving, so it is a bit lonely.”
3. you have the desire and skills, but where do you start?
Do you want to set up your own business as a consultant or become an interim or contractor? And what’s the difference? The monikers are largely interchangeable, says Dance, but agrees that contractors in the world of procurement tend to be professionals with a niche skillset brought in to oversee a technical installation. An interim role is more likely to be an executive-level position created for a set period to manage a team or project to completion. They become a de facto executive for the duration, and would have to deliver right from day one.
And then there’s a consultant. Consultancy businesses, generally based around an associate model, tend to specialise in niche areas such as transformation, HR or supply analytics. Picton has gone down this route, starting his company, Hengist Inspired, back in 2013 but keeping it dormant for five years.
“I was thinking about things in my spare time while fully employed,” he says. “Over those few years, I found myself taking any chance to ask someone their advice. I found it a real learning experience. About a year ago, it felt like the right time to give it a go.”
Having done both, St Hill believes interim is a better route if you want flexibility. One benefit of this approach is that recruitment companies are there to support you, headhunt roles for you and help with the administration/tax side.
4. How do you find business?
At the beginning of your contracting career you are likely to need the help of agencies, especially as an interim. Ask your network who they use and visit as many as possible. Both Earnshaw-Darg and St Hill stress the importance of face-to-face meetings so you can get to know each other.
And check how well agencies have listened to your needs when the roles start coming in, St Hill adds. “Are they sending you rubbish? If so, then cut that agency out. Be savvy and build relationships with a few of them. You should be left with between three to five good agencies who send you exactly the jobs you need.”
You will need a strong network if you choose the consulting route, advises Picton. “If you’ve spent time properly networking and finding time for others when they need something along the way, that network is the most powerful part of your ecosystem,” he says.
He echoes Dance’s view about listening. “The way I find work is actually blindingly simple: it’s to listen. It’s incredible how quickly people are keen to pitch and say what they do and sell what they offer. The best salespeople are, of course, listeners. It may not be me that can do what the client needs but, if I can make an introduction, who knows? I may never do any business or it may lead to something that I could help with. Focus on what the clients need and listen to them.”
5. How do you stand out in the market?
Procurement clients want delivery, period. It is vital you demonstrate straight away that you are a ‘doer’ and have personally delivered results. Dance says: “Often people talk about how they ‘helped’ on this project or worked in a team on that. Interims need to show they ran it or led the team.”
St Hill suggests asking recruiters what they would change in your CV and be prepared to accept those changes, while Picton stresses being really clear on what you can do well. “Combine knowledge and experience, then lace that together with practical examples of where you’ve done it and why you think that’s a different combination.”
He also suggests using platforms such as LinkedIn or Keynotes to offer thought-provoking ideas, explain trends and show you are up-to-date with news in procurement.
6. What are you worth?
If you don’t have a clue how to price yourself, you are not unusual. Earnshaw-Darg suggests using an online calculator to work out the full-time equivalent of a day rate. If you are going interim, then ask the recruiters. And if you are offered a role, do the sums – don’t just think about the salary equivalence but also lost benefits, tax and fees such as accountancy.
According to the CIPS/Hays Procurement Salary Guide and Insights, last year the average overall day rate was £499 (down from £505 in 2017). You will receive more in the private sector, where rates rose slightly last year to £553 while in the public sector they fell to £404.
Paperwork. If you are not careful, you can get bogged down in it when you should be spending time finding the next role/client or enjoying your new-found flexibility.
The amount of paperwork depends to some extent on how you set yourself up. Some recruiters will suggest using an umbrella company. This is an employment business that acts as an ongoing employer to agency contractors. If you are working through an umbrella company, you are normally treated as an employee of that company and have to fill in the necessary forms and timesheets.
Setting yourself up as a limited company means more cost and administration. Check out online services to help you file your expenses and do bookkeeping. Alternatively, if you are paperwork averse, you can ask an accountant to do some, or everything, for you. Get recommendations from your network.
There are some disruptors ahead, such as IR35 coming into force in the private sector in 2020. The reform is already in place in the public sector and means that if a person is working through their own limited company then they are no longer in charge of determining if the intermediaries legislation (IR35) applies. The IR35 determination now falls to the public body and, if it applies, PAYE tax and national insurance contributions are withheld at source.
8. Are you psychologically ready?
When employed, your work takes place within an external framework that gives structure to your days and weeks. As a contractor, while client work dictates to some extent what you do and when, it falls to you how you structure your time, the strategy you adopt to build your business, the priorities you set and how you manage your time and energy.
According to Elloa Atkinson, director with CDP Leadership Consultants and a member of the International Society for the Psychoanalytic Study of Organisations, this can take a heavy toll psychologically. “Trying to make these decisions on an ongoing basis can lead to a sense of overwhelm and ‘decision fatigue’ – a deterioration in the ability to make rational, strategic decisions, and an increased chance of making an easier but not necessarily a better choice, caused by having to make endless choices with no let-up. Most of us have to deal with cognitive overload,
but for the self-employed, having to do everything increases the likelihood of experiencing this on a frequent basis.”
It’s important, therefore, to pay attention to your energy levels; carve out time for thinking and reflection, planning and getting things done. Atkinson also suggests reflecting on your emotions, particularly loneliness, which can increase when you are no longer part of a team. Says Picton: “You’ve got to keep that cadence and rhythm to your day, to your week, to your times, because no one is holding you to account other than yourself. That discipline is a big deal. Even though psychologically you might not have a structure that’s making you busy, you can ensure you stay busy.”
One way of keeping busy, meeting people and making yourself an attractive contractor is to ensure you update your skills. It is up to you to make sure you are up with current trends, thoughts and practices – and to pay for courses. Network, watch TED Talks and attend forums and events. They all help. And don’t just do it for the money. As Earnshaw-Darg says: “If you like supervision and process-driven roles then you will struggle. But if you are enthusiastic and
go-getting, and love variety, then why not give it a go?”
It may be nerve-racking going it alone, but if you are prepared you will never look back.