Is the UK workforce one of contractors?

Thursday 17 July 2014

Contractors are making their mark in the UK workforce and research has shown that 36 per cent of people in Britain have worked as either a contractor, freelancer or agency worker at some point in their career.

A report entitled 'Flex appeal: Why freelancers, contractors and agency workers choose to work in this way' from the Recruitment and Employment Confederation (REC) revealed that more and more people in the country have chosen a flexible way of working. Indeed, 41 per cent are considering working as a contractor, freelancer or agency worker in the future.

REC chief executive Kevin Green said: "Working as a contractor, freelancer or agency worker is a choice for many people, and flexibility is a key reason they opt for this kind of work. Flexible working especially appeals to young people, parents and people scaling back as they approach retirement.

"Sometimes temporary work is looked down on as a second rate or a dead-end career choice. But if you talk to people who work this way, they value being able to fit work around their family commitments, can earn more, or are using temporary assignments to pick up specific skills and experience they couldn’t get elsewhere."

According to the research, one in four (24 per cent) has been a temporary agency worker, while one in ten (ten per cent) has worked as a contractor. One in ten (11 per cent) has also worked as a freelancer.

Meanwhile, it was observed that 40 per cent of people who currently earn £30,000 or more have worked as an agency worker, contractor or freelancer.

Of those earning £50,000 or more, 22 per cent have been agency workers. Additionally, among those individuals who currently have hiring responsibilities within business, 36 per cent have worked through an agency themselves.

With the trend for flexible working growing, the REC claims there needs to be more done to support people who choose to operate in this way.

"We need to do more to support people who want a better work life balance, not penalise them," Mr Green said.

He added that employers need to treat temporary workers like permanent staff and ensure there is better communication and access to training.

The REC has also called on the government to make the tax system easier to help temporary workers comply, while banks have been asked to make applications for mortgages more accommodating.

Indeed, one of the fears of those considering striking out on their own is the burden of tax compliance and managing finances.

Accountancy services are an asset for many self-employed individuals, while contractors often choose to work via an umbrella company to simplify employment.

An umbrella company is beneficial for flexible workers, as it takes the hassle out of finding the next job.

Now is certainly a good time to be a temporary worker, with the REC and KPMG reporting the sharpest rise in hourly pay rates for November 2007. Demand is rising too, putting further upwards pressure on salaries.

By Victoria McDonnell

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