Contractors could be set to enjoy a ‘perfect storm’ of demand as multiple economic factors converge that will increase their attractiveness to private and public sector clients.
There is an increasing body of hard evidence that contractors are a force for good in the economy. Research by PCG and the European Forum of Independent Professionals (EFIP) has concluded that European economies that have vibrant contracting and freelance communities have outperformed those that don’t.
Further evidence of the value of the flexible workforce comes from the Confederation of British Industry (CBI) and recruiter Harvey Nash, and shows that the UK’s labour market flexibility is what has kept clients hiring.
And it is a well known, and logical, phenomenon that contractors are the first out when times are not so good, but the first to be re-hired during those tricky days of uncertainty when a recovery has not quite gained sufficient momentum to justify hiring employees. Recent commentary by marketing recruiter EMR underscores this situation.
Preliminary estimates of Gross Domestic Product (GDP) by the Office for National Statistics (ONS) for the third quarter of 2013 suggest that the UK is no longer in a recession.
This may be the thin end of the wedge of economic recovery, and a time when contractors can really add value to organisations by enabling them to increase capacity whilst managing risk.
We’ve also just seen the publication of a government-commissioned report by Lord Heseltine, No Stone Unturned in Pursuit of Growth, which includes sweeping recommendations. These foresee a close partnership between the public and private sectors and the local support of small businesses, in which contractors and freelancers will play a major role.
Furthermore, Lord Heseltine’s report acknowledges that the public sector lacks many of the key skills required to drive a growth strategy. It recommends tearing up the rulebook on public sector hiring, thus removing a major barrier to growth.
If implemented, the result may well be many more public sector contracts, particularly in disciplines such as procurement and change management, despite the introduction of the damaging off-payroll rules.
And the report’s recommendations also emphasise the need to encourage entrepreneurship and small business growth, two activities in which contractors and freelancers are key enablers.
This convergence of conditions may lead to a ‘perfect storm’ of contractor demand if contractors can meet the challenge of recognising and maximising the opportunities presented as any eventual economic recovery gathers pace.