The year just gone brought more than its fair share of upheaval to contractors and to the future of the UK economy. The public sector IR35 reforms and Brexit alone are quite enough to cause concern. Contractors will rightly feel as though they’ve been targeted unfairly, and if that wasn’t enough, the parlous state of affairs with the EU doesn’t exactly fill one with excess optimism.
Yet despite the ill winds, there are plenty of positives, not least an ever-growing dependence on the part of organisations on hiring specialist contractors to plug those acute skill shortages, even more so in times of uncertainty. We look at some of the reasons to be cheerful and why we think 2017 will be a good year for contractors …
Before getting too carried away with predictions (which even venerable business publications such as The Economist readily admit to getting wrong), much of what will happen in 2017 has been already decided by events in 2016. The effects of some are clearer than others.
The public sector IR35 reforms were confirmed by Chancellor Philip Hammond in November’s Autumn Statement and will come into effect from 6 April 2017. While there will inevitably be some fallout from the changes given that the onus of responsibility to determine IR35 status will now fall on the ‘engager’, contractors legitimately trading outside of IR35 should continue to do so. The rules apply to public sector contractors for the time being, although there are fears that the private sector will follow suit despite the government’s assurances to the contrary.
Quite how the Brexit negotiations and ‘hard’ or ‘soft’ landings will unravel remains to be seen. As we wait for Theresa May to trigger Article 50 (she is confident that this will happen by March 2017) which will set in motion a two-year leaving process, the consensus is that while UK growth forecasts will be slightly revised downwards in 2017, all the economic data so far has reinforced what many Brexiteers argued – that the UK economy would prove extremely resilient. So far, and with the unemployment level at an 11-year low, it has. Organisations will continue to hire top talent with specialist contractors high up the list.
Boosted by the government’s £1bn upgrade to the UK’s internet infrastructure and with organisations investing in their own systems, the demand for digital talent and software engineering contractors has never been greater. London is the leading technological hub in Europe and counts more developers than New York. The City of London will not lose “its gravitational pull in terms of management of capital” in the words of Barclays CEO, Jes Staley and will continue to provide opportunities for contractors working in many different fields, not just in IT and technology but in more traditional professional services such as finance and legal.
Perhaps the biggest winner of the Autumn Statement, and where there will be most jobs for construction and engineering contractors, was the £23bn of government investment earmarked for the UK’s transport networks, including roads and railways. The housing sector has also benefited to the tune of £5.4bn with R&D also getting £2bn per year. The first phase of ‘High Speed 2’ (HS2) will begin in 2017, the £18bn Hinkley Point C project (which will create 25,000 jobs) was given the green light by the government and Crossrail (to be named the Elizabeth Line) will be completed in 2018.
Even with these growing opportunities, there is still competition for places so contractors mustn’t forget some career essentials. There are still job applications to think about, so it is important to ensure that skill sets are up to date, and where necessary, investment in training is always money well spent. Particularly at this time of the year, CVs need to be revisited, ready to send to agencies. Whether a sole trader or small business, a searchable online presence is a must, so LinkedIn profiles need to be accurate. And as contracting expert and author Steven Baker reminded us in our interview, networking is key, both online and in person.
The year ahead will no doubt be challenging. The public sector reforms will signal change for the contracting community and the after effects of Brexit will increasingly be felt by UK plc. Yet the UK economy is still predicted to grow in 2017 fuelled by the fiscal stimulus in public sector infrastructure investment. And as we’ve highlighted, the opportunities for skilled contractors in 2017 are not lacking in both the public and private sectors.