The majority, or 62%, of senior decision makers in medium and large-sized businesses are concerned about missing out on temporary talent ahead of the introduction of new IR35 regulation, according to new research from Robert Half UK.

The research showed that 62% of medium and large private sector businesses cite concerns about missing out on skilled contractors and temporary professionals when IR35 legislation expands to the private sector from 6 April 2020.

After this deadline, every medium and large private sector business in the UK will become responsible for determining the employment status of any contract worker they use. If the contractor is deemed to fall inside IR35, the worker will be required to pay National Insurance contributions and income tax due via PAYE or via an umbrella company.

Robert Half also found that 42% of medium and large private sector organisations are concerned about losing current temporary workers to the new IR35 rules if they cannot re-negotiate employment contracts in time. While 15% plan to offer more competitive pay rates to their contractors to secure them.

Ahead of the introduction of the new regulation, 33% say that the demand for temporary workers will increase, while 7% are anticipating a decrease.

Matt Weston, Managing Director, Robert Half UK commented, “Business leaders are concerned about the impending IR35 rules and its potential impact on the UK’s temporary talent pool, particularly as firms look for a blend of high performing temporary and permanent employees to pursue growth strategies in 2020.”

“A number of businesses are already considering measures to avoid falling foul of the new regulation, while still being able to compete for skilled talent who favour flexibility and autonomy. With the UK competing with other international centres for the world’s top talent, working with a specialist temporary recruitment consultancy that is able to attract and secure contractors who are willing to adapt to the new rules will be crucial for their ongoing success,” Weston said.

For more on IR35, refer to SIA’s briefing ‘IR35 Off-Payroll Working Rules: FAQ’.