Contractor numbers are continuing to grow and clients are increasingly choosing to hire contractors over employees. And while the UK doesn’t look likely to emerge from its current period of sluggish economic growth any time soon, there are always sectors that thrive in economic downturns, resulting in opportunities for those working in that industry.
So, will contracting be the sector that thrives in 2013, making this the year of the contractor? The evidence increasingly suggests that it will.
Several independent measures confirm that the UK’s flexible workforce of contractors, freelancers, consultants and interims is growing. The most recent Labour Market Statistics from the Office for National Statistics shows self-employment at historically high levels. And PCG’s latest ‘Kingston Report’ shows contractor and freelancer numbers reaching 1.56m in 2011, a 12% increase since 2008.
The number of independent professionals across the EU has increased a staggering 81% since 2000, to reach 8.56m, according to a report by freelance economist Stéphane Rapelli. Commissioned by the European Forum of Independent Professionals (EFIP) and PCG, it estimates UK contractor numbers at 1.625m. Clearly, from a supply-side perspective, the number of contractors is growing.
On the demand side, forward-looking surveys suggests that client demand for contractors will increase, largely as a result of the ongoing threat of a return to recession. The Chartered Institute of Personnel and Development’s (CIPD) most recent Labour Market Outlook notes that a third of the UK’s employers have increased their use of contractors “due to the uncertain economic environment”.
The Manpower Employment Outlook Survey Q1/2013 offers a double helping of upbeat contractor prospects. It forecasts contractor demand in early 2013 to be twice that of early 2012. And ManpowerGroup UK managing director, Mark Cahill highlights that: “There has been a seismic shift in the nature of employment, with many of the new roles created being temporary or part-time positions.”
The case for increased contractor hiring this year is further cemented by Deloitte’s latest Chief Financial Officer (CFO) survey. Although finance directors of major contractor clients “are entering 2013 in a more optimistic mood than they entered 2012”, they threaten a round of cost cutting by the UK’s largest companies. It may sound counter-intuitive, but this strategy plays into the hands of contractors, who are the perfect lower risk option for organisations seeking to maintain or grow capacity without increasing permanent headcount.
Contractor numbers are growing at a rate that the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs shows are being absorbed by client demand, because both billings and vacancies are increasing. There are even warnings by REC that some contracting disciplines are facing skills shortages.
Will this combination of growing contractor availability and increasing contractor demand, against the backdrop of an uncertain economy, make 2013 the year of contracting?