Why now is the time to be in the contract market
The demand for contractors within the UK economy has greatly increased in recent years. In 2019, temp/contract placements accounted for 85% of the UK industry’s £38.9 billion revenue, equating to £33.4 billion. The contract market was already booming – now, in the midst of Covid-19 and the business challenges it has presented, there’s even more reason to enter the contract market.
Following previous recessions, the contractor/temporary market has always come back strongly and quickly. Flexible workers are critical requirements for a vast number of companies today; a recent Deloitte survey indicated that 70% of executives deem the on-demand workforce as either “important” or “very important” to their business.
Of all the challenges that the pandemic has created for businesses, one of the biggest is cash flow. Companies see the on-demand workforce as a more flexible, cost-effective alternative for tackling projects that require specific skills sets and experience. Whilst companies may not have the resources to hire permanent staff right now, the contract market continues to offer billing opportunity.
One reason now is an especially good time to be recruiting in the contract market is the 12-month deferral of the IR35 reform brought on by Covid-19. This has several benefits for contractors and clients alike. Contractors don’t have to worry about Status Determination Statements and can simply carry on being responsible for their own employment and tax status as before. And with the pressure of the reform having been eased off clients until April 2021, some may be more likely to be open to contract opportunities over the next six months.
Specialist skill sets are at a premium within all sectors, meaning there will be a scramble for highly skilled flexible workers. For recruiters, branching out from perm and building a strong network in the contract market allows for a more flexible offering to clients and their needs. Diversification equals security, which is an invaluable commodity in uncertain times such as these.
If you’re a recruiter looking to launch a business in the contract market, or you have a perm business that you want to scale with a contract offering, get in touch at info@recruitmentvc.com to see how Recruitment Entrepreneur can support you.
