What will happen to all the ‘PPI contractors’ post the deadline date?
30 August, 2018
The Financial Conduct Authority has set a deadline of 29th August 2019 for claimants who wish to seek a refund for payments made in relation to mis sold Payment Protection Insurance. The cost of this remediation programme will cost the sector a suggested £48.7 billion. An eye watering sum, especially when, in the early days, it was believed that it would cost somewhere in the region of single figure billions. The end will be a relief to the Financial services sector as it can finally draw a line in the sand, enabling them to focus on and invest more in rebuilding the trust of their customers. However, for those contractors engaged in supporting the financial and banking sector and the many claims companies, who have set up to support customers seeking to make claims, as the date draws closer they will be concerned about their future.
Having spent nearly 4 years supplying contractors, I recruited a very significant number of very skilled and experienced legally and financially trained individuals. No-one could really have envisaged that this short-term resource solution would be needed for quite so long and throughout the PPI Remediation period many contractors enjoyed good day rates which were adjusted according to qualifications and experience. However, in the last few years these day rates have reduced and the margins once achieved by agencies supplying contractors have dropped quite significantly.
Incase anyone might suggest that this was a fairly straight forward and easy assignment I can tell them, from first-hand experience, that it was not. As the FCA tightened their regulation so too did the quality checks on their output, which were relentless, and failure to achieve quality standards would results in a very short-lived engagement. The pressure they were consistently put under was pretty unforgiving, and for the most part (at least the ones I worked with) many have survived and have created a career in contracting. Leading up to and from 29th August 2019 this career will be over.
What is concerning is, what will happen to this workforce post the deadline? What we do know is that some of the banks and financial institutions have already started to ask the agencies supplying these long-term workers what they will do to help those who have helped them to make, in some cases, many £millions?
The purpose of this article is to offer advice to those who need to prepare an exit plan, because for many their role will not exist after August 2019, and in fact potentially earlier. It’s the uncertainty over what jobs will be available for them, and for many there will also be a big drop in income. It is therefore important to start preparing now rather than leaving things to the last minute, as the time leading up to the deadline is likely to be very stressful. By considering options now the transition from contracting to permanent roles may not be quite so onerous. Here are a few suggestions.
Explore your options
Explore potential career options both internally, within the company you are currently working for, and externally for another business in the sector. Internally, there may be opportunities to transfer into another department. You will already be known to the business, and as there will be a potential skill shortage post Brexit being able to transfer an existing colleague will be hugely beneficial as there will be less of a need to train from scratch because you are already familiar with the culture and environment. Just remember that you will probably have to adjust your reward package, but you will now have the benefits enjoyed by permanent staff, which includes more job security.
Alternatively, you can look for new employment elsewhere. This could be the perfect opportunity to use the skills you have developed in your career thus far in a new industry. You will have developed plenty of transferable skills throughout your career that other companies will find desirable. Ensure you do plenty of research into the industries you are considering, and ask for other people’s opinions on career options, whether this is a professional opinion or one from close friends and family members.
One of the most important things you can do for your future job search is to start thinking about it NOW. Ask yourself, ‘what can I start doing immediately that will make myself more employable in the role or industry I hope to transfer to?’
LinkedIn is an important tool and valuable resource you can use to help you in your job search. It is used commonly by recruiters and companies to post current job vacancies, and to assess and access potential candidates. Today it is assumed that you will have a LinkedIn profile; if you don’t have one, you could potentially miss out on over 200 million prospects. Although you only need one job, the right job! The platform should be used as a base to tell your story; your profile needs to be complete, with a professional and approachable image and contact information clearly available. Conduct some research into who the directors or hiring managers are of the company you are interested in and contact them directly, as they will know where the gaps are within their workforce.
Networking events are also a great way to make yourself known in the industry within which you hope to secure a role in. They allow you to form business relationships with like-minded professionals and encourage you to interact on a face to face basis, making you more memorable should one of those connections need your skills. In order to get the most out of each networking event you attend, ensure you talk to new people at each event. It can be easy to naturally gravitate to the people you are friends with or have connected with at previous events, but try to focus on communicating with new people. Aim to swap business cards with anyone you connect with and if you are using LinkedIn, connect with them via the site with an accompanying message detailing where you met and how much you enjoyed speaking to them at the event. These networking events are definitely worth while attending, especially if you are considering moving into a sector unrelated to the financial services; just one good connection could be enough to move your career in the right direction.
Get additional qualifications
Once you have decided what role you aim to transfer into, we advise you to do some research into what qualifications are needed. If you have been working in the financial services industry for several years it is possible that the entry qualifications may have changed; for example, the FPC 123 that was once a requirement has now been replaced by the diploma and many financial services roles in this sector require level 4 or above for the more specialised roles. If you are transferring into a new industry, where you have little or no industry experience, it may be beneficial to look into qualifications or courses you can do to enhance your industry knowledge and demonstrate your enthusiasm to succeed in this new field. Having additional and relevant qualifications will elevate your CV and application when the time comes to begin applying for a new position.
Financially prepare for the end date
As mentioned earlier some contractors will have been on a higher day rate to reflect their unique skill-sets and experience, but also to cover the lack of benefits received as an employed staff member, i.e. holiday pay, sick-pay, bonuses, healthcare, notice periods, pensions, redundancy payments, etc. Some of the better agencies will have considered retaining some of the contractor’s day rate in order to accrue a good final payment, others may have used some of the profits made to pay a bonus for long service. However, most will not. Check with your agency if they have made provision for you NOW, and if they haven’t, start to save some of your payments as you may have a gap between the end of your contract and the start of your next role. A rule of thumb would be 5% of your daily rate. If you are on £200 per day and start saving now (52 weeks) you will have at least £2600. Better than nothing!
The key message is the importance of planning ahead. Don’t be in a position where you are settling for an average job because you are in desperate need of money. With the experience you have gained, you will be highly employable with very valuable knowledge, discipline and transferable skills. Good luck in your search, and I wish each and every one of the fantastic contractors I had the pleasure of working with between 2011 and 2014 much success in the future.
If you are affected by the PPI deadline and would like some additional information and advice, please contact Janet McGlaughlin or Mohsin Hanif on 0161 960 0376 / 0113 332 0678.