BS Internal Audit Mid-year - Flipbook - Page 7
BARCLAYSIMPSON.COM
7
Subdued contract market
The changes to IR35 rules concerning disguised
employment through the use of personal service
companies (PSCs) are nothing new, but the effects of
these changes on the internal audit contract market are
significant and long-lasting. It is now rare for internal
auditors to be engaged on a contract basis using a PSC.
INTERNAL AUDIT & CONTROLS | RECRUITMENT MARKET UPDATE 2024
One would normally expect that demand for
temporary/contract internal audit staff would increase
when the permanent market is subdued. This is not
currently the case, and there is very little demand for
flexible resource using PSC or PAYE contractors. It
is currently much more common for internal auditors
to be engaged on a fixed-term contract (FTC) basis.
HR departments generally favour the FTC route to
hire short-term internal audit staff, as it is usually less
expensive, but high-calibre career contractors do not
typically wish to be engaged in this manner.
The contractor loses the trade-off between flexibility
and rate of pay through a contract. While FTCs
are called “fixed”, a notice period exists in every
contract, so security is reduced, as is the rate of pay.
Companies that engage internal auditors on an FTC
basis will invariably lose them as soon as that person
either finds a permanent role, or they are offered
a day-rate gig elsewhere. This creates planning
problems for Heads of Internal Audit.
Therefore, Heads of Internal Audit are increasingly
attempting to bypass HR functions and engage
with consultancies and statement of work service
providers to secure the flexible resource or subject
matter experts (SMEs) they need to deliver their audit
plan. BSS, Barclay Simpson’s service and solutions
consultancy arm, has experienced a strong uplift in
the use of its services to deliver outsourced and cosourced internal audit services.
Lack of investment in training
Consultancy firms that provide internal and external
audit services were historically a major source of
candidates commencing their internal audit careers.
This tradition is not as prevalent as it used to be.
These firms now hire many staff from overseas
utilising the Skilled Worker visa sponsorship
route. Doing so enables them to attract relatively
experienced staff at a reasonable cost, compared
with hiring and developing junior staff to the same
level. However, the staff employed on Skilled Worker
visas are essentially trapped unless they can find an
employer willing to sponsor a visa application, which
is rare, or until they obtain the right to remain and
work after five years of being sponsored. This creates
a bottleneck in the market.
Companies themselves are keen to recruit
experienced internal audit staff. They used to hire
external auditors and then train them as internal
auditors, but the strong preference is now to hire
experienced internal and IT auditors. Again, this
creates supply-side issues with companies as they
chase to recruit from too small a talent pool. These
supply-side training and development issues need
to be addressed by the profession but there are
currently no signs of any concerted efforts to do so.
