A Lamb Associates Limited

Why an SME should consider Specialist Commercial Consultants

In a challenging marketplace, engaging specialist commercial consultants offers many benefits to SMEs. 

The construction sector has always been a challenging marketplace, but with recent events it seems more challenging than ever.

As we’ve discussed elsewhere, the cost of labour and materials has increased, with both in scarce supply.

Particularly for SMEs, adequately resourcing its commercial function is a real issue.

The options SMEs may consider as covered in this article are to:

The idea of engaging specialist commercial consultants is a solution that many SMEs may never have even considered.

This article highlights the many benefits of engaging specialist commercial consultants and explores why they can sometimes be the perfect solution, for reasons you may not have considered.

The need for Resource

There are many reasons an SME may need additional commercial resource, often at short notice. This could include:

  • A series of tender wins – even winning one more than planned can leave the team over-extended;
  • A key team member is off sick, resigns or is on maternity leave;
  • A job which becomes more complex or bigger than anticipated

In all these circumstances, the company may need additional commercial support.

The options in this situation are:

1. Carry on as normal

A company may decide to continue on, either entirely without a commercial function or with an under-resourced team.

For many small challenges, SME business owners may decide to deal with matters themselves. For commercial matters, that means taking personal responsibility for payment applications, variations, contractual disputes, pricing works etc.

Some small companies see this as a saving. The theory is that by not having a dedicated commercial resource, they can avoid paying the required costs. In doing so, they forget that a business owner’s time is a valuable resource that could be better utilised elsewhere: managing the business, delivering the projects, winning new work and growing the business.

In the case of an under-resourced team, the existing commercial function is asked to take on more and more work, which inevitably means more mistakes, more risk and more fire fighting.

Common problems with an under-resourced team include:

  • Key commercial issues get missed: proper entitlement is not claimed;
  • Contractual notices are not properly served: proper entitlement is lost;
  • Proper records are not kept: claims cannot be substantiated; and
  • Staff are overworked: leading to resignations and even more pressure on the team.

All of the above can have a determinantal impact on the commercial success of the business, which is crucial to the actual success of the business.

2. Employ a full time Quantity Surveyor

It may be that the SME decides to directly employ a full time Quantity Surveyor. However, this can be a significant investment for a business, both in terms of time and cost.

Quantity Surveyors are currently in very high demand, fuelled by the skills shortage and the lack of younger people entering the profession. The situation has intensified in the last five years and good Quantity Surveyors are now a scare resource.

Timing Concerns

From placing an advert to interview stage through to making an offer followed by candidate acceptance can be a time consuming process. Then, many of the best candidates are on three months’ notice. It is not unusual for the process to take 4-6 months, assuming suitable candidates can be found.

Whilst businesses wait on finding the perfect Quantity Surveyor, the projects they are working on will not wait.

ALA can help by providing short term solutions whilst your company undertakes a recruitment process, allowing your business to meet project commercial requirements in the interim.

Cost Concerns

As well as the difficulties in recruiting, there are costs associated with taking on permanent staff in addition to the headline salary which may include:

  • Advertising costs
  • Recruiter costs
  • On-boarding
  • Employer’s National Insurance
  • Paid holidays
  • Pension
  • Benefits
  • Cost of training
  • IT
  • Mobile phone

With ALA the SME can pay one simple daily rate and only pay for the days our resource is working.

Other Considerations

There are also other considerations. An ambitious or driven individual will want training and the opportunity to become chartered or to continue to develop and challenge themselves. Does the SME have the proper training infrastructure to attract and retain the best talent in a competitive job market? Many don’t. If not, the SME will likely have to pay a premium salary to make up for the lack of opportunities and structure.

Recruitment is also a big commitment. Permanent recruitment is a great option if a company has a constant flow of projects that will fully utilise a Quantity Surveyor’s skillset. In an uncertain market, what happens if the next project is not forthcoming, and the company has employed a Quantity Surveyor with no continuing requirement for one? No company wants to have to let staff go, there are costs and complexities with redundancy and so many feel uncomfortable recruiting in the first place.

3. Hire a Quantity Surveyor Contractor

Hiring a self-employed individual may be an attractive alternative to employing a full time Quantity Surveyor. This Contractor option offers the ability for a short notice period with flexibility for both parties, and a simple daily rate.

Depending on the project the SME may not require a Quantity Surveyor contractor on a 5-day week basis, if their duties can be completed in 2 or 3 days. If the QS Contractor is short on work, they may agree to a 3-day week. However, if a 5-day week opportunity becomes available, the contractor could serve their notice or just leave. This leaves the company in a disordered state desperate need of commercial help.

Contractors are also usually at the senior end of the market. Often companies need intermediate or junior resource at short notice and a Contractor with 30 years’ experience is not appropriate for the role. The contractor option is therefore really on viable for Senior QS roles and above.

The Contractor market does have some good people. However, there are many journeymen in this market and people who move from job to job when the going gets tough.

If the SME knows they need the Contractor full time for a long period, there is an option of a full time engagement and a longer notice period. However, in this scenario, both the Contractor and the company need to consider the risks/cost associated with IR35 (discussed in further detail below). That simple daily rate may not be so simple.

4. Engage Specialist Commercial Consultants: ALA

The fourth option is to engage professional Quantity Surveying Consultants, like ALA. This allows the SME to engage a solution tailor-made for their needs. Whether the need is 1 Assistant QS for a day a week or a full commercial team from Senior QS to apprentice for 5 days a week, ALA can help.

ALA Benefits: IR35 Compliance

For many years, self-employed Contractors have been engaged via Limited Companies.

Stricter enforcement of the IR35 rules make this a less attractive option for many.

Previously the liability would fall solely with the individual. However, the liability has now been expanded to include the employer. This means a business found with Contractors who HMRC considers should be ‘inside’ IR35 could be left with a big National Insurance bill, holiday entitlement pay, and hefty fines.

For larger contractors, this ‘IR35 risk’ means engaging a consultant is no longer a viable option. SMEs may equally be wary of the risks.

However, at ALA all of our staff are direct employees. This means the Quantity Surveyors we provide will never face any ‘IR35 risk’. Put simply, ALA pays National Insurance and benefits for our staff so there is no risk.

ALA Benefits: ‘More than People’

Although the SME may only need one Assistant Quantity Surveyor, engaging ALA provides our clients with full access to our many years of experience across the business. All of our resources are fully supported and every commission we undertake is appointed a ‘Project Director’ to provide advice and support to our resource.

Our teams share knowledge, insight and experience so that when you engage ALA you pay for one individual but you get the benefit of the whole team.

ALA Benefits: A Truly Flexible Team

If an SME employs a Senior Quantity Surveyor for a project, this can take 4-6 months as discussed above.

ALA resource can often be mobilised at short notice. Furthermore, if additional support is required  we can increase commercial resources to meet the demand.  If requirements change the team can be reduced commensurately with the workload.

In the time it takes for the permanent staff member to be engaged, ALA could have provided a commercial team specifically adapted to suit the particular needs of the project.

ALA Benefits: Continuing Staff Development

Ambitious and motivated staff want continuing development. In busy teams or in small commercial departments, structured training is often overlooked. It can be difficult to keep staff motivated and engaged.

At ALA, we provide highly motivated staff who are driven to push themselves to achieve their potential. We provide ongoing formal training and support and structured training and career paths.

Our staff are provided with a market-leading benefits package.  We understand that happy, balanced and healthy people enjoy their work more and work to a higher standard.

We invest in our staff and our clients benefit directly from that investment.

ALA Benefits: A Managed Service

Companies can of course consider using a professional recruiter or a large professional services firm to provide resources. This can remove some of the stress from the recruitment process and potentially lead to a quicker engagement than undertaking the process by yourself.

However, from the date the resource starts on site, it is the company’s responsibility to manage them and deal with any issues with performance. The recruiter takes no responsibility for delivering the works or the performance of the individual. They simply want their commission. Likewise many larger professional services firms are numbers driven and want ‘bums on seats’ rather than focusing on the quality of service.

In an SME where there may be limited other commercial resource on hand, no one takes responsibility for service delivery and there is no oversight.

At ALA the situation is different. Our Project Directors take a personal interest in every job and are there to support and assist our resources with delivering the services. If there are any issues, if you need more resource (or less) or feel the services should be being provided differently, simply pick up the phone.

Summary: Benefits of Specialist Commercial Consultants

In times when commercial resources are scarce and budgets are difficult to forecast, engaging commercial support through specialist commercial consultants like ALA makes a lot of business sense.

  • IR35 Compliance: our resources are full-time employees, so there is no risk.
  • Fully supported resource: why take on just one person when you can have the knowledge of a whole team?
  • Flexibility: our teams can adapt to your needs quickly and cost effectively.
  • Staff Development: engage the best and brightest for your project without needing to worry about benefits packages, training programmes or staff retention.
  • Managed Service: the service does not end with engagement. Our Project Directors take responsibility for service delivery and are always available to provide further advice and support.

If your business would like to find out more about engaging any of our commercial resources, on either a full- or part-time basis, please Contact Us for more information.