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Contractor hiring on the rise as firms eye COVID-19 recovery 

Businesses turn to contractors over employees to assist recovery 

Firms are more likely to engage freelancers and contractors than employees to help them recover from the COVID-19 pandemic, new research has revealed. Figures published by the Recruitment and Employment Confederation (REC) in the latest Jobs Outlook showed that employers’ intentions to hire temporary workers have increased over the past few months, following some of the worst months on record. According to the staffing body, this is a positive trend that is likely to prove important to the UK’s economic recovery. 

Hiring intentions at highest level since 2018

As reported by the REC, from May to July, employers’ intentions to hire contract workers in the short-term (the next three months) increased to net: +6 from net: +2 in the previous period – the highest level since October to December last year (net: +9). 

Similarly, in the medium term (over the next four to 12 months), employers’ intentions to hire contractors increased to net: +13. This is the highest level since August to October in 2018.

Rapid access to key skills favoured

When asked why businesses engage freelancers and contractors, 67% said that temporary workers offer access to key skills on a short-term basis. The number of firms of this view increased 14% from the period prior to lockdown, January to March (53%).

The data also revealed that businesses overall are more likely to bring in temporary staff over permanent workers in the next three months. This is the first time this has been the case since the period May to July 2018 – a welcome development when taking into account the recent confirmation of IR35 reform which, with COVID-19, has raised concerns about a potential contractor exodus.

Flexible workforce one of “UK’s great economic assets”

In addition, the REC suggests that more and more businesses will be using flexible labour to adapt and help them grow and recover from the pandemic in the coming months. Neil Carberry, the REC’s CEO, said: “A flexible jobs market has always been one of the UK’s great economic assets – keeping employment high in the good times and ensuring people have more options when times are tough.”

“[The] data shows that as lockdown eases and the economy recovers, businesses will use temporary work to start to build back. That makes sense, and matches the pattern of previous recoveries. While the path ahead is still uncertain, temporary work helps firms create jobs sooner, and helps people who need new jobs get back to earning quickly.”

Research by the confederation also showed that temporary work is just as important for individuals as it is for businesses. Two in five (39%) of people in the UK have done temporary, contract or freelance work during their lives – and the majority of this is by choice. 

By Contractor Weekly

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3 thoughts on “Contractor hiring on the rise as firms eye COVID-19 recovery ”

  1. IR35 Victim

    And yet there are only a handful of contracts in the Manchester area now, compared to the 1,000+ of this time last year and NO it is not Covid that has killed the market it is solely IR35.

    The ones on offer are at rates not seen since the mid 90’s

    So sorry your article paints a rosy glow and actually it is brown and smelly.

    HMRC dogma over logic every time.

  2. XY

    If hiring intentions are still less than in 2018 when you’d expect that now there would be a heap of pent-up demand bursting the dam… that’s not good.

    With Sunak’s father in law being one of the major beneficiaries from IR35 (co-founder of Infosys, second largest Indian consultancy – and consultancies are the big winners in this, with their competition hamstrung), don’t expect any change any time soon.

    IR35 has now driven me out of contracting and IT altogether. Is running a B&B really the best use that the UK can find for someone with many years experience in IT?

    It seems the UK is levelling down, not levelling up. Every party is left of centre now.

  3. A

    I have been approached for new contract roles but the rates are way too low. It is the employer trying their chances prior to IR35 legislation.

    Once IR35 is pushed through a lot of contractors currently working outside will just leave what they do and reinvent themselves.

    As a full time IT contractor I have a sideline of rental properties and will end up going into full time property development.

    The thought of being forced into a situation as a freelance contractor for temporary work just does not sit well with, and a lot of my colleagues

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