Umbrella companies are becoming the hassle free choice for contractors with
their low service efficient returns post the IR35 rulings. We interview Rob
Crossland, Service Director of Parasol IT about his company and the practicalities and benefits of moving to an umbrella solution.
Interview
Q) When and why did you start Parasol IT?
A) Parasol IT was in the planning stages in 1999 and we went live in February 2000. We developed the service based on a joint venture between an IT consultancy and an established accountancy practice. We saw the imposition of IR35 coming in and personally wanted a new way to work. This had obvious benefits of getting IT pragmatism with a solid accounting and taxation background.
Q) What is the Parasol IT Unique Selling Proposition? Why should people choose you over your competitors?
A) Service, service, service. We have spent four years continually developing systems and solutions to deliver a service that really works. We will continue with that process and ensure we deliver that service. Our feedback is that it is the most important thing for individuals.
Q) Quality of service is a key factor when contractors choose an umbrella company. How have you continued to maintain a high level of service with the huge growth of your business over the years?
A) It’s been difficult and we have not always got it right. Being honest with people is the key when we have not achieved the levels of service we would like. We have invested in both systems and people to keep pace with the growth and the other key point is communicating what we are doing and why.
Q) Are your new client’s first time contractors, or those moving from limited companies to umbrella solutions?
A) Combination of the two plus people coming into the UK from abroad and coming into contracting. Of the people coming from Ltd Co’s to us they seem to almost always focus on the hassle factor of running a ltd company compared to the ease of an umbrella. First timers seem to like the ability to “dip their toes” and as we have no setup nor termination fee’s and we help them through the whole contracting “thing”.
Q) How easy is it to start using an umbrella for first time contractors?
A) Very easy, we provide a true online system that they can use and we follow that up with customer service calls to fully explain what they need to do and why. We liaise with the agency or client and just make sure that they can concentrate on doing the job rather than worrying about getting paid.
Q) What is involved with a contractor moving to your service from a limited company?
A) We employ the same level of service for experienced contractors as that for first timers. We can provide advice and some guidance on winding a company down although we recommend that the contractor talks this through with his/her accountant. The key point is that we make sure everyone knows what is needed and required to make the transition (which is not as hard as it may sound).
Q) Do you think it is the end of the Ltd Company for most contractors?
A) No. I think fewer new entrants will chose to set up limited companies due to the nature of the economic society we are now in. Temporary contracts and the associated way of working will, in my opinion, create situations where individuals will have to chop and change how they organise their administration. However, there will always be a requirement for limited companies in the contractor sense.
Q) What was your experience of you recent down turn in the market?
A) There was obvious pressure on rates for the contractors but the number of people using our service continued to grow. This could be a side effect of people trimming costs e.g. reducing accounting charges or closing limited companies. At the same time we increased the inclusive features within our service so we hope this also helped to maintain that growth.
Q) How do you see the future of the contracting market, given the increase in outsourcing?
A) I think the term “contracting” needs to be examined. There seems to be more and more individuals being taken on through temporary assignments and this happens at both ends of the rate scale. We see a continued increase in people making use of employment service companies and as a result contracting (in that context) will remain buoyant. If we focus more clearly on say IT Contracting then there will always be a market for in demand skills. The challenge for the individual is to remain flexible and keep up to date with that skill-set. I think a future successful contractor will have a broad skill set that can be easily honed and demonstrated to meet niche targets.
Q) What is next for Parasol IT?
A) A continued focus on service with that driving our exciting new brands and facilities. We tend to take time and effort to ensure we get something right first time and thus ensure long term stability and growth. We have very interesting plans in relation to some complimentary services, so watch this space…. Closely!
Published: Monday, March 08, 2004
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