In January 2017 we arranged a semi social team lunch between Kathryn, Mel and I. Unfortunately the tone turned quite gloomy. Our pipeline was thin, the IR35 legislation change had been confirmed a month previously and all NHS organisations were enduring the same pressure from the centre to reduce their use of all forms of temporary staffing. I found myself reassuring Mel and Kathryn – there was enough cash in the business to cover costs for a good 6 months, if not longer. We could weather a pretty prolonged storm. Had you told me then that in 2017 we would better our 2016 performance I would have delighted and surprised. But that is what we have achieved, despite some heavy turbulence along the way.
Our number of placements in 2017 was 2 shy of the total in 2016, but the context is everything, we can be far prouder of the 2017 number than the 2016 number. 2016 was the first full calendar year for Melber Flinn, having started in August 2015. There were 3 good reasons for our success in 2016. We started in the January with a higher than expected number of interims out, this always assures some financial comfort and you can see the revenue dropping in from that book of interims over the following 1-9 months. We also had one big client who gave us a lot of repeat business, which ultimately amounted to 40% of our total sales in the year. Finally, the market was relatively unregulated by current standards by HMRC and NHSI, IR35 was as was, yes we had price caps from April 2016 but compliance was patchy, and NHSI and NHSE business case processes didn’t hit until December 2016.
In January 2017 we started the year with a lower number of interims out, and a smaller pipeline. IR35 legislation change was due in April, but the anticipation of it was stalling the market even before it arrived. There was also a step change in interventional activity from NHSI, as they sought to have greater control over the interim exec market, and closely performance manage trusts on interim usage, aswell as regulate through the business case approval processes. Against those stronger headwinds we expected a deterioration in financial performance.
So why did we fair so well? I think through a combination of reasons, naturally the age of the business helps, as does a growing awareness of our brand which comes with the passing of time. We developed a stronger more proactive business development approach, with Mel and I working in tandem in terms of how we targeted new business and maintained current relationships. Kathryn’s role has grown, as she has taken on more accounting and finance duties, which has allowed Mel and I to focus on the recruitment. We work very well as a combined team. We have also diversified the client base, which means we will over time get more repeat business from more clients, which creates a healthy multiplier effect.
Interestingly though whilst we made 4% less placements in 2017 compared to 2016, we made 10% more in gross profit. So you might conclude we were making more revenue per placement in 2017, but this isn’t strictly true. You can’t directly correlate number of placements to financial revenue, as placements have different values in financial terms – dependent on the percentage margin, the candidate rate, and crucially, how long the interim works for. Those first two, average candidate rate and percentage margin, stayed remarkably constant. The average day rate for our placed candidates in 2017 was on £2 less than it was in 2016. We would have expected a greater drop given the pressures of price caps and the introduction of business cases approval processes for placement rates exceeding 750 / day. Our margin also held up at just under 15%, which again is something I will talk about more in a future blog.
One big new feature of our business in 2017 was revenue through one off fees. In 2016 we charged only one introduction fee, the rest of our placements that year were margin, ie we paid the interim and we charged the client the candidate rate plus margin. Contrast this with 2017, where 28% of our placements were a fee, and the remainder were margin. Charging fees is almost always worth less in revenue terms than charging, for reasons I will fully explain again in a future blog.
So why more one off fees? In 2017 the pressure was on from the centre for NHS organisations to engage interims sparingly, and where it could not be avoided to appoint them on a paye basis, ie on the bank, or fixed term contract. The change in IR35 legislation also indirectly encouraged greater use of paye models, as trusts struggling with new IR35 determination responsibilities felt it safer just not bothering to engage interims through companies. Where we placed interims on paye models, we would charge an introduction fee, usually calculated as a percentage of the salary, or sometimes we would charge a separate margin, ie the margin that we would have earned anyway if we had been hosting the contract. And of the 72% remaining placements which were day rate and margin, 1 third were in scope and 2 thirds were out of scope if IR35.
Encouragingly the fee based placements were all condensed into April, May, June and July, which was to be expected with the reaction to IR35 legislation change. For us they have since slowed right down, and we only had one between August and December. Which might suggest that day rate interim contracts are growing again in number. Sadly, I can’t report any detectable shift in client behaviour around IR35 yet. Starting in August we had a run of 10 placements in a row that were out of scope, we felt that the conservative reaction of comply comply comply might have quickly blown over, but we then finished the year with 8 out of our last 10 placements being in scope. Its tough to speculate on this point, although I still maintain over the long term things will improve. As clients come to understand IR35 better, as they come to market from to time, or get the right advice, awareness and knowledge will grow and a greater proportion of roles will be properly assessed, or structured properly to allow them to be out of scope of IR35. We’re still seeing ignorance drive too many automatic in scope determinations.
So we enter 2018 with significant hope and optimism. Our interim book is good, the pipeline is strong and with the addition or Rachel to the team to lead on commissioning and system wide roles we have the base from which to build further. We might have another team lunch at some point in January, but hopefully the general banter will be far less gloomy than this time last year.
Since January last year found myself saying to candidates and clients alike that I expected we would see a reduction in the overall size of our candidate network in 2017. This was based on an amalgamation of anecdotal evidence. Messages from the centre to deter organisations from using interim resource have been frequent and growing in volume, and with the IR35 legislation change confirmed in December 2016, we started last year with many candidates saying it was time to consider their options. It was looking harder to find opportunities, and the roles out there were paying less in gross terms and even less in net. When pushed I was guesstimating that 10-20% of candidates would leave the interim market in 2017.
But was I right? Around September time we made a note to run some reports in December to see exactly what had happened to the size and composition of our candidate network in 2017. Firstly to clarify the parameters, Melber registers candidates who operate in any professional function, between afc 8a and VSM seniority levels, and they must have NHS experience. I’d love to say we sometimes place off sector candidates into the NHS but the reality is that we don’t – there is no client appetite for it. We don’t register permanent job seekers, as we don’t do permanent recruitment.
In January 2017, we had c. 1300 candidates registered on our system. In an audit carried out in December we identified 60 candidates who during the course of the year had gone into permanent employment, 14 had retired, and 13 had become “inactive” interims, which in our parlance means they might be pursuing academia or consultancy, but either way, they were declaring themselves no longer interested in working as an interim for now.
That’s a total of 87 candidates who via one door or another, left the interim market in 2017. On the face of it is a low percentage at 6.7%. However, the reality is that percentage will probably be quite a bit higher. Of the 1300 we spoke to 1033 across the course of the year. What about the other 267 you might ask? Well for a combination of reasons we won’t speak to all candidates with the same regularity. Those 267 might be more peripheral to our core business areas, their search parameters might be more narrow, they might usually source all their work direct, or perhaps they just didn’t return our calls. But 87 out of 1033 of course is much bigger percentage – 8.4%. And even then the number of candidates who have gone permanent in 2017 will probably be higher, as there might be candidates who we last spoke to in August 2017 and they went permanent in the last 4 months of the year.
The perfect experiment would be a text or email poll on the 31st December to all 1300, but we’re not big fans of mass mail type contact.
Either way, one thing is for sure – supply has contracted in real terms in 2017, and relative to previous years it has contracted even further. I have been in the interim healthcare market since 2010, and when the market was really booming in 2013 and 2014 we would deal with 5 or 6 new candidate registrations a week. The backstory was often the same – beleaguered middle managers and execs working excessive hours and under constant pressure. Why not come into interim market where you can choose who you work for and with, have an end point, avoid the politics and earn more money. And of course we reassured them about their hopes and expectations – “come on in, the water’s lovely”. What we very rarely saw in those days were interim managers taking permanent jobs. Why would you, when opportunities were plentiful and rates were good? I wish I had done the same analysis in previous years to illustrate the contrast in an empirical way, but alas I didn’t. We will however run the same analysis in December 2018 and I will report back in a year.
And a higher number of interim managers going into permanent employment is just one indicator of poorer market conditions, I could pick a number of others, such as average rates, requirement volumes, conversion rates, client spend on temporary resource, and contract types to name but a few. In part 2 of this blog, I will discuss some of these other indicators, and also provide a detailed summary of Melber Flinn’s business performance across the year.
I started working with Steve initially in 2015. I was looking for a more flexible way of working to allow me to be around for my young family. Previously I had worked for recruitment businesses that were London centric. I live in Harrogate! They required me to be in London weekly as well as developing business around the country. My children hated me working away from home and they are growing up so fast I felt I was missing out on that precious time. Steve and I initially made contact as he was setting up Melber Flinn. The work I initially did for him was on an ad hoc, part-time basis, as and when he needed extra help, contacting candidates whilst he was out at meetings. It helped me keep my hand in and helped him out when he was very busy. Having recruited in the NHS interim market for over 12 years I knew a lot of the candidates and understood the market, so it worked well.
Last October we started discussing a more permanent, client facing role, focusing on the Commissioning & STP market, freeing him up to focus on the provide side. I was due to start in January 2017. Then came the news that the IR35 regulations were changing and there was considerable concern as to how that would affect the market. We decided to delay my start until we were clear what the implications would be.
Roll on to October 2017…
I’ve just started working permanently with Steve and the rest of the Melber Flinn posse on a part-time basis. Whilst the changes to the IR35 legislation have had a huge impact on the way clients engage interims and the length of time it takes to get those contracts signed off, the market has remained reasonably buoyant. There have, however, been some significant changes since I was last working in it:
1) Lead time – It used to be commonplace that the time from getting the go-ahead from a client to the interim starting was within a week. Whilst the requirements are still as time critical as ever, the bureaucracy around contract sign off/ IR35 determination, even when these have been pre-agreed at the beginning of the process, is regularly taking weeks, sometimes months! It goes against the whole principle of interim management and is frustrating everyone.
2) Day rates – I have spent the last few weeks speaking with some new and many seasoned interim managers. Many are currently sat at home, desperate for news of potential assignments. Some are considering permanent roles. Most talk about day rates being pushed down further and further. I spoke to someone yesterday who has worked as an interim Programme Director in the NHS at £750 a day for many years, but is currently working on £450 a day. “Better to be working than not”. Flexibility is everything in this market.
3) The agency market – VSM + level interim roles which used to form a significant percentage of the roles handled by agents like Melber Flinn are now more commonly being resourced directly via NHSE/NHSI. Organisations are constrained by the day rate thresholds when they reach a level that triggers a requirement to submit a business case. This reduces our ability to help many of the most senior candidates to find new roles.
This may appear to be all doom and gloom. Conditions remain challenging, but there is still a requirement for interim managers at all levels to help drive change within the NHS. We remain cautiously optimistic!
As for me, I love working at Melber Flinn. As the Budweiser slogan goes, It’s refreshingly different! We all work from home but get together regularly. I can drop off and pick up the children from school most days, but also have the camaraderie I really missed from working within a team. It’s a fantastic model. You don’t all need to be sat in an office together to work as a team.
I am clearly getting much better at new appointment blogs, given this one comes out just 2 months after Rachel Silverwood started with Melber Flinn on a permanent basis, and not 6 months after her start as per my “Hiring Mel Brown” blog earlier this year. As Rachel will explain in part 2, she was helping Melber Flinn on an informal part time basis in 2016 in my first year, but we have kept in touch since, trying to weigh up a good time for her to come aboard permanently.
After Kathryn and Mel had joined, Melber Flinn has had three employees, and crucially the team was coming together as I had envisaged in terms of the right people in the right functions. Kathryn and Mel are in vital support roles, but the next appointment for the business always needed to be a consultant, someone else who could join the front line with me in terms of being client facing and fee earning. Rachel was the obvious choice given her lengthy experience in the market, her cultural fit and her previous knowledge of Melber Flinn. And there was a similarly easy decision to make in terms of market split. When any recruitment business grows it naturally has to carve up patches and clients, this can be done on a geographical, market sector, job function or seniority basis. But it often means splitting the portfolio of an existing team or consultant to give some business to the new consultant. This of course spreads risk and coverage for the business, but it can alienate existing consultants, particularly those who are high performers and suddenly overnight see part of their patch or some of their clients being given away. When I first started in recruitment I actually remember my client base being decided by geography but also by letter of the alphabet, companies starting with M-Z in South Yorkshire were mine. Fantastically arbitrary!
So Rachel has joined Melber Flinn to focus on commissioning, whilst I will lead on providers. The sub sector split makes most sense, it allows us to develop better knowledge of our respective sub sectors, it allows for slicker referral and recommendation pathways aswell given professional networks can be sub sector specific and to an extent it allows for division of candidate relationship management aswell. Many NHS interim managers do tend to work in providers or commissioners, but there is probably a good 20% who can happily work in both sides of the system, and so naturally Rachel and I will both have relationships with that group. But Rachel will also be well placed to focus on STPs, ACSs and system transformation work, which we believe will be a big user of interim resource in the coming years.
In part 2 Rachel will talk more about her appointment and her initial thoughts about working here at Melber Flinn.
We have just had our busiest month ever at Melber Flinn for role flow. One of the key metrics for any recruitment business is how many requirements you register on an ongoing basis, it’s a test of market demand, and reflects how well you are developing your client side relationships. For most recruitment businesses it is the main challenge, because at any given time you’ll be grappling with variable market conditions, working hard to develop relationships with candidates and clients, and also competing against the competition. But role flow in itself means nothing without a conversion rate. You can secure all the requirements in the market but if you don’t convert and place them you’re not doing any business. And conversion rate has been our problem of late, not because we can’t source good candidate options, and not because we can’t price competitively, its mainly because of client indecision and ignorance around IR35.
In a blog at the end of this year I plan to present a more detailed summary of Melber Flinn’s performance, which will further illustrate how the contractual landscape has changed in 2017, but in the meantime I wanted to recount two recent examples of roles we have handled, where IR35 and to a partial extent NHSI pressure on organisations to reduce temporary staffing has thwarted what might otherwise have been fairly quick and straightforward placements.
The first was an interim Deputy Director role with large multisite trust. The trust in question had lost its previous post holder and a potential secondee lined up from NHSI had fallen through at the last minute. We took the brief and asked the important questions up front – what was their IR35 determination and on what contractual basis could they proceed. The hiring manager by her own admission had a reasonable but not detailed knowledge of IR35, I presented 5 contractual routes and advised her that the role was likely to fall in scope of IR35 if assessed against the online tool because it was cover for a vacant substantive post. She tentatively agreed and we committed to starting the search offering the role to candidates on an in scope day rate basis, or on a day rate basis but to join their bank. Two candidates were sourced, presented and one was shortlisted for an initial phone interview. That went well, but a face to face meeting was required which didn’t take place til 12 days later. That too went well, and an offer was made. Success! Not nearly. Thereafter we entered into lengthy negotiations, the trust wasn’t responding when I was chasing them on which contractual options they wanted to choose – day rate, through a PSC and in scope, or day rate direct on their bank. The candidate in the meantime suggested after interviews that an improvement remit could be created, off structure, and out of scope of IR35. I suggested that as a third contractual route to the client, which if anything might have been unhelpful because it gave them more choice. 12 days after the face to face interview the client came back and confirmed they could engage the candidate on their bank, but her rate would need to come down as we would have to shoe horn the total cost under 750 / day to avoid submission of a business case to NHSI. Luckily we weren’t far off this figure anyway but we worked backwards from 749, factoring in employer’s NI, charges from their bank (which was managed by a third party) our margin (which I reduced) and candidate’s rate (which had reduced). 36 days after taking the brief, we finalised the offer, but the delay had eaten into the assignment duration. NHSI had lined up another secondee for the trust who was due to start on a fixed date 3 months later, therefore shortening the duration of the interim assignment. Something else had come up for the candidate, ironically from NHSi and at a better rate, where agency margin wouldn’t have been a factor and could have been passed onto the candidate to improve her rate. Crucially it was a longer duration and as she explained to me, security and longevity are all the more important in an uncertain market.
The second was an interim role supporting a trust with 17/18 business planning for 4-5 months. The hiring manager was substantive but had previously worked as an interim. This is helpful as she immediately had an understanding of IR35, the interim required would need to be a self starter and work autonomously, and to an extent they could choose the location from which to perform the services as the writing elements of the remit could be done from home. We immediately found a strong option who had just been doing a similar role at another trust and was due to come available at the right time. An interview was quickly arranged and they hit it off. All looking good, this is going to happen. But the trust was coming under increasing scrutiny about its locum doctor and agency nursing expenditure. Yes this business planning role on a standalone basis could be out of scope, but the hiring manager did not want inflate the scrutiny of temporary staffing spend by appointing an expensive interim on an out of scope of IR35 basis. “How much would it cost on the bank?” they asked. The candidate requested a 20% increase in her rate to compensate for the extra taxation / loss of tax relief on expenses, and when that cost was combined with the 13.8% employer’s NI, plus margin, the total cost to the client shot up by 30% compared to the out of scope price. Unaffordable they said, understandably. After consultation with HR the client decided to advertise on a fixed term contract basis for 12 months, given they had another vacancy in the same team which could be amalgamated into the business planning role. Against all odds, the candidate remained interested. The content of the role and her enthusiasm to work for the specific hiring manager ultimately outweighed the comparative financial loss of the fixed term contract. She needed additional terms such as parking, but the client recognised they were getting a bargain securing an interim on a fixed term contract basis. 32 days after taking the brief, the candidate accepted, and the client was delighted.
Ive always worked on the principle that if the candidate and client like each other at interview, you’re 90% there. 9 out of 10 processes reaching that stage will result in a placement, the harder parts of the process, the journey from 0% to 90% is in securing the brief, and then crucially running the search and finding the right options at the right price. But in our new post IR35 2017 market reaching that stage of mutual interest post interview now only feels like 60%. And in 2017, 60% is mile 16 in a marathon instead of mile 12 in a half marathon. The journey nowadays is longer and the final stages considerably more painful. In that last 40%, any number of reasons can kill a placement, be it internal approvals, external approval of a business case, deciding on contractual routes, making the IR35 determination, agreeing terms and also – maintaining candidate interest when processes become protracted. As in our first example, candidates are liable to disappear because goalposts move or because other things come up and they need to take the bird in the hand.
A few years ago I took for granted how easy it was in a contractual sense to do business, the default contractual model was PSC and day rate, IR35 was the candidate’s responsibility (although we would always be looking to support legitimate out of scope arrangements through robust contract templates). Contracts were never quibbled and approvals rarely needed. I once remember placing a role in 4 hours, I sent one CV of a plum candidate to a client at lunchtime on a Friday for a Deputy COO requirement, they had a phone interview at 3pm, and client offered candidate on the phone to start on the Monday. That is an extreme example, but consider that underlying cost of sale against the cost of sale of a process that takes 32 days to conclude and many many more man hours. And as a recruitment business if each role takes on average a lot longer to conclude, then your capacity is reduced, you cannot competently handle as many roles concurrently. And if you place less of them (conversion rate) you are making less sales, and if we are making less per placement (more of which in a future blog) then your profitability is being eroded from a number of angles.
Good businesses will have to innovate to survive and prosper, and thankfully Melber Flinn has kept it costs low and its head comfortably above a profitability line. All agents and interims alike need to work hard to better educate and inform clients about IR35, in an honest and objective way. This will be one of our key objectives in our client dealings as we go into 2018. We expect market conditions to remain challenging for the foreseeable, but over time the market will better understand IR35 and how to manage the challenges it presents to how business is done.
On Wednesday I published part 1 of this blog. I’ve bravely requested questions from colleagues Mel and Kathryn, and promised to answer them as best I can. Part 2 follows below:
What do you have planned for year 3?
Expansion. Me, Kathryn and Mel have formed a great unit, and the structure, process and functioning of the business is exactly how I imagined it to be when I was planning Melber Flinn a few years ago. And I have discussed this with Mel and Kathryn – we could stay as we are and continue being successful, but there is a limit to how big the company would get from a turnover perspective. I need to professionally challenge myself, and growth should help build the resilience of the business particularly if (God forbid) Kathryn or Mel should ever decide to leave. So we hope to hire certainly 1, but hopefully 2 more people in our third year.
Have you been surprised by the impact of IR35 this year?
Yes and no. We’ve known since November 2016 that it was coming, I think the whole industry was in the dark too late about how it would be practically applied. The publication of the test and associated guidance was late in coming, and I remember even in March, candidates still speculating that the legislative change would be postponed or abandoned. I’ve been surprised that demand doesn’t seem to have been too badly affected. I really didn’t have high hopes for 2017, I thought it would be a year for toughing it out and getting by. We had a meeting in January where I talked to Kathryn and Mel about the financial position of the business, and we plotted some worst case scenarios in terms of cashflow and the minimum business levels we would need to keep going. Thankfully, its never got close to that bad, and against all our expectations, we saw a 30% uplift in new roles in April/May/June compared to Jan/Feb/March. The composition of work has changed, and we have been placing candidates in scope, out of scope, on outputs based contracts, on day rates on trust banks and on fixed term contracts. Having those contractual discussions with clients lengthens the recruitment process, but you can act in more of an advisory capacity to support clients. We had made 1 more placement year to date at the end of June 2017 compared to June 2016, but our interim numbers have dropped. That’s because for more of our placements, we’re charging one off fees instead of margin on day rate, and those fees are compensating for the drop in fees associated with our day rate interim numbers.
If you asked your children what is Daddy’s job what would they say:
I asked them independently so they couldn’t influence one another’s answers
Finn (aged 9): “You get people jobs”
Flo (aged 6): “You work in your office, doing work on your laptop.” (Me: Can you remember, is it something to do with hospitals?) Flo: “Oh, you call people in hospitals and look after people”
Given the added benefit of being able to spend more time each week with the hilarious Kathryn and Mel, would you consider opening an office?
Its not on the horizon yet! We are all networked up on cloud based systems, and of course WhatsApp is one of our main communication tools. I’m honestly not seeing the benefit at all yet of an office. Mel was most wary of not having an office to go to, but I think even she now sees the benefit of walking upstairs to work and staying in your pajamas all day. I know another consultancy business that had a virtual / home based model until they hit 60 people and it worked well for them. I recognise some of the benefits of working in the same space together, but frankly for Melber Flinn I don’t think they come close to outweighing the benefits we all enjoy of home working.
How many cans of Monster have you consumed since starting Melber Flinn?
Ouch! I know this is a terrible habit, but in my defence its my only real vice, I don’t drink tea and coffee. It’s probably an average of 1.5 cans a day, so over 5 working days a week and two years, its going to be around 660. Do you think Monster might sponsor Melber Flinn?
How would you describe your current work / life balance?
Very good! I think home working plays a really big part, I’m generally on the road 2 days a week, but when Im not, I see Mary and the kids every morning and evening. Not commuting gives me an extra hour in my day. Im very passionate about Melber Flinn, but life is for living and I don’t want to put things off in life because Im too busy working. Working for yourself also gives that flexibility to take holidays away from holiday day entitlements, or to go and see school sports days. You always have to keep an eye on the balance, but good planning and organisation helps, and Mel and Kathryn make sure Im out seeing clients and candidates when I need to be, but that also the workload of the company is well distributed between us.
Do you struggle to fit in work around your holidays?
Ok I see a theme here. Kathryn also recently emailed me to say that instead of keeping a holiday diary of when I was out she would keep a work diary of when I planned to be in!? I am definitely going on more holidays whilst at Melber Flinn, but as per above life is for living and its nice to plan holidays without worrying about entitlements or whether they overlap with colleagues. And whilst it is nice to be away, I never truly switch off – the mobile and laptop are never far away.
Pick your favourite moment from year 2:
1) Mel Brown joining the business
2) Kathryn Kitson attaining Platinum Standard in the Health Trust Europe Audit
3) An evening in the hot tub with one of your favourite clients
This is easy, 2 out of 3 answers will alienate a colleague, 1 out of 3 will compliment a client. Answer = hot tub night.
Would you rather be attacked by a massive badger of a gang of angry squirrels?
Squirrels. Badgers have pretty big claws for digging. I think they could do some serious damage. I’d hope you could at least pluck the squirrels off you and throw them away.
Which dead celebrity would you like to have dinner with?
Kim Jong il. I have a mild obsession with North Korea. He was in a warped position of power – propped up by a state that needed a figurehead for communism, and yet he knew it was failing despite the country’s propaganda to its citizens about how well it was doing.
I feel exhausted. I think next year (provided we make it to our third anniversary) I will ask candidates and clients to set the questions, I hope they will be kinder.
August 7th 2017 saw the second anniversary of Melber Flinn. It’s a well-worn cliché, but time really has flown, I can’t quite believe it’s been two years already. Last year I marked the first anniversary by doing a mock interview with Kathryn and Rachel suggesting the questions. Against my better judgement, I decided to follow the same format this year, with my two colleagues Mel and Kathryn again setting the questions. “Ask anything you want, and I will answer truthfully” I said to them, knowing that whilst risky, it should make for an interesting blog. They attacked the task with gusto, sending me a long list of questions, with Mel’s husband Nick chipping in with a few extra. True to my word I’ve answered them all and divided the responses into a two parter, with the second part of the blog to follow next week. Deep breath, here goes…
What is your motivation?
This is a really tough one, its partly about being the best I can be at what I have chosen to do, but then frankly, its also about hopefully about creating a successful business which gives me financial independence and life options. I want to have the option to retire early and explore other ventures in life. We’re only here once.
What is the best piece of advice you have been given since setting up the business?
This is a great question, but I can’t honestly think of that single nugget that has stayed with me. I remember an old recruitment colleague of mine, who also set up his own business, telling me that if I backed myself I needed to go for it, and not think about getting other partners involved. And Im glad I took that decision, it ramped up the risk, but having full ownership of Melber Flinn has meant full control and I have not had to worry about being distracted by the interests or differing views of other shareholders.
What makes Melber Flinn different to other agencies?
Recruitment is recruitment, ultimately we provide people to fill gaps or solve problems. That’s what every interim agency does and it annoys me that some of them dress it up as something different. “Human capital solutions” is one of my pet hate phrases in the industry. So we’re proud to be a recruitment business and hopefully what makes us different is the customer experience, the values are about being honest, straightforward and transparent. I want every client and candidate to feel like we are on their side, advising objectively, and not serving our own agenda.
What have you enjoyed blogging about more, IR35 or marathons.
One is something I am extremely passionate about, I think about it all the time. But on the other hand I do like running too.
Approximately how many miles have you run during work hours in the last two years?
Ha ha! Not enough! In my defence, my work day usually starts at 6am, Im at my best in the mornings and if I get 1.5 hours done by 7.30am, I don’t feel guilty about going for a run later in the work day. And the run tends to be my lunchbreak! In terms of a specific number, I think on an average of 50 miles a week, with an average 6 miles a day on week days, the answer is probably around 3000 miles.
What is your biggest regret over the past 12 months?
Not moving invoice finance providers earlier. My accountant pointed out how much they were costing me and I was flabbergasted. They weren’t sending me monthly invoices, instead, they took their fees by stealth from my funding availability, and so their costs weren’t as visible to me as our other suppliers. I then dithered over switching, thinking it would be a big hassle and their customer service might improve, but if anything it got worse. We’ve made the move now and so far Im happy with the new provider.
What has been the longest journey you have driven to visit a client? Was it worth it?
Dorset, and we will see! Im happy to travel anywhere, sometimes people supposed our main business base is Yorkshire, but we actually do relatively little locally. Because most interims will travel, and because we have a nationally dispersed client base in the NHS, you have to be ambivalent about geography and be willing to business anywhere.
What is your favourite work lunch?
Usually at lunchtime Im good, because I will grab something out of the fridge in my office, ideally chicken or prawns. Its dinner time where my discipline falls apart!
What would your super hero powers be?
Teleportation every time.
Check back on Friday for part 2, featuring IR35, hot tubs, and angry squirrels.
By way of an introduction my name is Mellissa Brown. I joined Melber Flinn in November 2016 as a Resourcing Consultant. My role here is to support Steve manage his candidate network through maintaining relationships with existing interims, building relationships with interims unknown to our business and sourcing the best candidates for live roles. I am no substitute for Mr Melber; he still actively participates in all of the above duties. However, as the business continues to grow – despite operating in an extremely difficult environment, I partner with Steve to ensure we continue to provide a first-class candidate experience to our interim community.
The good news is that 6 months in I am still here. And last week Steve even added my profile to the website. Thankfully the speed at which he recruits is a lot faster and efficient. To mark my work anniversary and introduction on the website I thought now would be a good time to write my first blog. And what better subject than evaluating my first 6 months recruiting in the NHS.
It will not surprise you to hear discussions around the changes to IR35 status have dominated conversations pre and post its application. When I first joined, it felt there was a quiet optimism that these changes might disappear and this would all be a horrid dream. Fast forward to April where the dream has become reality. In reaction to these changes it appears many organisations have chosen the risk adverse approach; making a blanket decision to classify all existing interims as in-scope of IR35. During this uncertain time many interims have accepted the change and are sitting tight, delivering what was asked of them and hoping the storm will have settled down by the time they are seeking their next position. For those who find themselves available and seeking their next role many are holding out for an out of scope contract. Interestingly over the past 8 weeks, of all new roles Melber Flinn have been asked to recruit only 15% have been classified as out of scope. 35% have been considered in-scope. 5% have been fixed term contracts. The interesting part is since April 45% of new roles at Melber Flinn came to market with no assessment having been made. This has led to a two staged recruitment process where we have had to present candidates no matter what the determination of scope is and then latterly revisited this dependent on the outcome. I am sure this is a bone of contention for you as interims as much as us the agent representing you.
Of course we are only 8 weeks into the changes. And we had a breakthrough last week with revised NHSI guidance on 31st May, stating that organisations should not be applying blanket approaches, and instead assess off payroll workers and pieces of work on a case by case basis. Steve is set to blog about this soon, but we hope organisations will be having better internal conversations so that roles are pre-assessed when they come to the market. We all know the advantages this will bring in saving time for all parties involved.
Regardless of these legislative changes and the tough market conditions we operate in I have really enjoyed supporting the NHS. This is my first time recruiting in the sector having previously developed my interim networks in FMCG and Financial Services. I must admit I was a little nervous about the move from private sector to public sector. There can be a lot of stigma around public sector candidates and the slow pace of change in this market place. Needless to say, I have been pleasantly surprised. Steve has built up an enviable network of interim executives who lead turnarounds and deliver change across all directorates. The challenges these interims face in this sector are unprecedented. Of the conversations had I have been impressed with candidate’s professional background, drive, energy and passion to make a difference.
For me the subject matter has been fascinating. We all have a vested interested in the NHS, so getting closer to it; understanding the mechanics of how it operates, where the troubles lie, hearing the success stories from people at the heart of the institution who are driving forward change has been a real highlight for me. Working with candidates who directly affect people’s lives instead of the P&L’s of huge corporations is refreshing.
So my hopes for the next 6 months at Melber Flinn. Continue with my learning on the sector. To develop more relationships with the interim community in the NHS. Provide an outstanding customer service to you all. And for us all to have a summer filled with long sunny days! Happy days.
If you are an interim healthcare professional and we have not yet spoken then please get in contact. I am available for confidential discussions on 07375 372379 or email@example.com
About four weeks ago my not so new colleague Mel offered to write a blog for Melber Flinn, which of course I was delighted about as it meant I wouldn’t have to bore our network with another IR35 or marathon blog. She wanted to write about her experiences so far at Melber Flinn which I thought was a great idea, but in true Melber Flinn blog tradition I thought this could be a two parter, and I had best write the prequel to tell you how she came to be here in the first place.
Mel and I worked together at Interim Partners for 5 years, and most of that time we sat on the same pod in Harrogate, with me covering health and her working on consumer and then latterly financial services. So professionally there was very little overlap but nevertheless we formed a good friendship. Mel is a great recruiter, and I could see that we operated with similar outlooks and ideals. She was extremely hardworking, often working late into the evenings or coming into the office on a weekend if she had to meet a tight deadline, or to generally catch up on workload. She also operates with a conscience, not a common character trait in our industry, but a strong sense of conscience usually indicates strong self awareness, and behaviourally it means that most of the time, you’re doing the right thing, even if it might not be the most profitable thing.
On setting up Melber Flinn I always had a role for Mel in the back of my mind, but had no idea whether she would be interested in joining me. She took maternity leave in November 2015, and in the summer of 2016 I approached her to see if she was firmly planning to go back or whether she might be open to other offers. Luckily she was receptive to the conversation, and crucially I was able to offer her the flexibility she needed, in terms of working from home, and also working part time so that she still had a full 4 days a week with her son Otis. So in November 2016, Mel joined Melber Flinn, increasing our headcount 50% from 2 to 3.
So what exactly is it that Mel does? She has a varied and broad remit, which is mainly focused on the candidate side of our network. Most importantly she oversees management of the candidate network. That basically means we are keeping in touch with people, and we know where they are working, what they are doing and when they are available. She also helps forward plan my diary, ensuring that we maintain both client and candidate relationships and that I am on the road at least 2 if not 3 days a week to meet people. As an extension to this function, Mel also provides the cover back at base, not only is she getting me out of the office to do the business development, she allows me to do it by covering back at base. So if I am on the road for the day and a new requirement comes through in the morning, Mel can be running searches and sourcing candidate options. This is a welcome contrast to the first year, where I had an ongoing struggle to manage the balance between road time and desk time, we lost more than one job because I simply wouldn’t be in the office to react fast enough and by the time I did respond the next day to a client, we had lost ground to competitors.
And how is she doing? Very well. We both worried a little about her transition into health but she took it in her stride, is getting fully conversant and knows her CQUINS from her CQC! The system we have is effective and it is working and Im really optimistic for the future. But most importantly Mel is a great colleague, she works hard and importantly she challenges me, even to the point of introducing quarterly performance reviews where I have to account for my activity and results. Her banter is average, but with help from me and Kathryn, it should slowly improve over time.
On Saturday 23rd April the Melber family headed down to London, I’d like to think this was for a family weekend, but the reality is that it was principally for the marathon, with some family activities added to the itinerary to assuage my guilt. We hit Hamleys on the Saturday afternoon, then gorged on pizza for the carbs, before taking in a show at the theatre in the evening.
This month’s IR35 blog features an in-depth analysis… not really. It really is all about running marathons.
In part 1 of my latest IR35 blog on Friday I covered some analysis of questions in the new IR35 test and also discussed how clients have reacted defensively to their new assessment responsibilities, as they scramble to properly understand IR35.
No sooner had HMRC published the long awaited IR35 assessment tool, called the Employment Status Service on 2nd March, I was inundated with texts and emails from interims who were testing themselves and joyfully declaring out of scope results. Certainly my initials thoughts were ones of relief, as the test seemed to be far more lenient that the initial test version I had seen in December, which had 55 questions, and the worrying initial 12 question section which seemed to be trying to catch anyone with a greater than 5% share in their limited company – i.e. everyone.
Over Christmas a candidate kindly sent me a copy of HMRC’s prototype assessment model, intended to be used by public sector organisations from April 2017 to assess the IR35 status of off payroll workers. We’re 10 weeks away from implementation and worryingly there is no sign of a release date for the final version yet, I emailed HMRC on 4th January asking for confirmation of the planned publication date of the test but have had no response.
The technical guidance to support the change in IR35 legislation was released on 5th December and can be found here: https://www.gov.uk/government/publications/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation-technical-note/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation-technical-note#treasury-procurement-rules-for-public-appointees
Its happening. The IR35 changes announced in the Budget statement in March have come to pass and will be implemented from April 2017. Responsibility for determining IR35 status will shift from the candidate to the intermediary or the client. In one sense no one can complain, its simply the closing of a loop hole which has been exploited on a widespread basis since IR35 legislation was passed in 1999.
NHSI sent out its latest letter to provider CEOs, Chairs and DoFs on 17th October urging them to do more to curb spending on temporary resource, and outlining new measures and controls to restrict how interims are hired.
That is not an allegorical title and this blog contains no information or comment on NHS interim management. It is an entirely self indulgent and lengthy piece on running marathons. So if you’d prefer not to read on I’d quite understand.
Medical locum agencies were struck a blow last week as Jeremy Hunt announced plans to invest in training 1500 more doctors a year. This represents a 25% increase in the number of funded medical school places and potentially addresses two issues, firstly it reduces UK reliance on foreign doctors when post Brexit it might become more difficult to import them, and long term a larger complement of permanent NHS doctors reduces the need for high cost locums.
In July, NHSE and NHSI co-authored a financial reset document, outlining instructions to all NHS organisations on the actions they must take to help stave off the worsening financial positon of the system. Within the document were specific new rules targeted at CCGs and CSUs which require organisations to seek ever increasing levels of permission from NHSE to appoint interim managers above certain day rates.
August 7th marks exactly one year since Melber Flinn was incorporated. To commemorate the occasion, I thought I would write a blog, but in a mock interview style. So below are some questions to which I thought people might like to know the answers. I’ve also included answers to some suggested questions from Kathryn and Rachel.
Back in May I published a blog about expanding the headcount at Melber Flinn and the important addition of Kathryn to support me with the administration of the business. But I am also delighted to have Rachel Silverwood aboard.
In my last blog I wrote about a recent HSJ article, which cited a fourfold increase in the number of requests by trusts to engage off payroll executives. A couple of people had emailed me since asking me about part of my comment for the article, that day rates may increase after next April.
I was quoted in the HSJ this week (http://www.hsj.co.uk/topics/workforce/spike-in-demand-for-off-payroll-interim-trust-executives/7005064.article?blocktitle=Snews&contentID=20377) in a story that covered an increase in requests made to the TDA by trusts for permission to appoint off payroll interim executives. My contribution in the finished article was brief, and I thought I would use my blog to elaborate on my thoughts.
Earlier in my recruitment career I had a go at management, but I soon realised I wasn’t very good at it. I got frustrated when people didn’t follow instructions and do things the way I wanted them doing, and I have a natural aversion to confrontation, which stunted my ability to pull people into line. But inevitably as I look to grow Melber Flinn, I might have to dust off and develop those skills.
George Osbourne yesterday announced an intended clampdown on the engagement of personal service companies by the public sector. The new measures will be out to consultation but if introduced they will represent some big changes to way in which the market operates. On page 98 of the full 168 page budget document, point 2.40 states: “From April 2017 the government will make public sector bodies and agencies responsible for operating the tax rules that apply to off-payroll working through limited companies in the public sector.
In part one of my recent blog I talked about the latest letter from Jim Mackey and the looming implementation of price cap guidance. In the ten days or so that have passed since writing part 1, I’ve had my own first hand experience of a client holding the line. I had introduced two operational managers, for three vacant roles, and had submitted both to the client at market rates.
Jim Mackey, the new Chief Executive of NHS Improvement wrote to all NHS providers last Friday 18th February to advise that as of April 1st all trusts in scope of the agency rules use approved frameworks for the procurement of all agency staff. I will blog separately about my own framework status, but the interesting point for me in the correspondence was the additional guidance for framework operators.
I saw a great post on LinkedIn in December by a chap called Paul Burton. Link is here:
Earlier in the week I blogged about using an invoice financing company to cashflow my interims, and the expectation from the company that I am beginning to develop some basic corporate infrastructure including management accounts. With my retrospective accounts now built, hopefully it becomes a maintenance job, and actually the maintenance is less labour intensive than I anticipated, because of great products like Xero, which automatically generates invoices and Receipt Bank, which scans receipts and extracts the data to build your expenses claims – no more envelopes bulging with receipts to process!
I spoke to my invoice finance company last week and they politely notified me I am going to exceed my funding limits next month. Apparently, I’m one of their fastest growing clients. For the uninitiated, invoice financing companies give you a certain percentage of the value of your client invoice. So if I place Joe Bloggs at Springfield NHS Trust, charge 1000 / day, and raise my first invoice for 5000 at the end of week 1, the invoice company gives me 90%, or 4500, which of course I use to pay my interim.
On Wednesday I wrote about an interim who had recently started an interim GM role on an NHS trust bank. Below I have provided the analysis on the income and benefits differentials of a bank vs limited company arrangement, which may help candidates to have a more amenable view on what has previously been a contractual route to be avoided at all costs.
I recently met a candidate who had just started an interim General Manager role with an acute FT, on the trust’s bank. In my 5.5 years as an interim healthcare recruiter, this is the first example I have found, but I wonder whether it will become more commonplace? I asked the candidate how the arrangement came about.
Consider the following statements from a recent report about NHS price cap guidance:
“Proposed price caps could deliver savings… of £370 million under a 55% cap. It is important to note that there is a significant margin of error around these estimates.”
It has been three weeks since NHS price cap guidance came out and in that time I have taken briefs on 6 new interim requirements. Three of the clients have not mentioned the guidance at all and we have entered into a recruitment process at market rate. One client said they absolutely had to have someone for a start on 16th November and they weren’t going to narrow my search further by giving me a depressed budget. Client five said we’d have to be aware of it, but there would be “plenty of ways around it” and perhaps we could write 60 hour weeks into the contract to optimise the rate for the candidate. It would up to the client to then manage the timesheets on that one.
It’s easy to develop a sense of victimisation with NHS price cap guidance. Interim is our world and we’re immersed in it, but the guidance was written primarily for agency nursing and medical locums.
I met a HR Director earlier this week who said “the problem with the new price cap guidance is that its success is predicated on all NHS organisations acting in unison, when in fact we are all inherently competitive and we all want to attract the best talent to our organisations.” And therein lies the problem on both sides of the market. We have a looming strike scenario with the potential implementation of price caps for interims, any NHS organisation willing to override the guidelines and pay market rate for an interim, because they are a performing FT (unlikely) or just desperate for resource (far more likely) will distort the market. Candidates will come to learn that there are two types of clients, those that will pay market rate and those that won’t, and they will be more inclined to hold out for those that do, whilst those clients that don’t might soon be learning the hard way that you get what you pay for.