Estate agencies are moving away from employment contracts and towards ‘contractor’ agreements as the cost of taking staff on the books reaches new heights, says Sally Asling (main image), director of ProFind Property Recruitment.
She says: “The overheads of taking someone on the books are higher than ever. For many property companies, particularly independents and smaller groups, these costs are starting to bite”.
National Insurance contributions, workplace pensions, increasing minimum wage thresholds and statutory leave entitlements mean costs are rising and Asling says that these, when combined with tighter margins, reduced pipelines and more cautious spending from clients and buyers, agencies are rethinking their hiring strategies.
New model
Consequently, when it comes to sales and business development roles, more estate agencies are moving away from traditional employment contracts and embracing contractor or consultant-style agreements.
Instead of a basic salary, Asling recommends the worker is paid a monthly retainer, which they invoice through their limited or sole trader company. Commission is also paid on invoiced terms, based on completions or deals agreed.
She says this model is well-suited to senior negotiators, viewing assistants, sales progressors, and experienced property professionals returning to the industry part-time, offering flexibility and freedom to the individual and reduced long-term cost and commitment for the employer.
Contracts are often rolling monthly agreements or fixed-term, reviewed every three to six months. This setup reduces liability and cost for the business while still enabling companies to attract top talent.
Targeting
The works well, Aisling advises, for talent who’ve previously been self-employed or held director status, as well as working parents seeking more flexible arrangements.
But she warns this structure isn’t ideal for every role or business, as it can raise questions around IR35 tax status, and requires well-written agreements, working best when the contractor has a degree of autonomy.
Nevertheless, during her work within the property industry, Asling reports she’s increasingly seeing this model open doors, enabling companies to bring in high-calibre professionals without the long-term financial risk of adding to payroll.
