Contractors aid workforce strategies

Friday 31 October 2014

A number of employers are looking for ways to create a leaner but efficient workforce and it seems limited company contractors and umbrella company contractors are the key to this.

The finding was uncovered as part of the Recruitment Industry Trends Survey 2013/14 from the Recruitment and Employment Confederation (REC).

It showed that these leaner workforce strategies were created as a result of the financial crisis, where businesses were trying to find cheaper ways to reach the same levels of productivity. Through the use of contractors, firms have been able to expand capacity as and when they need and gain access to specialist and strategic skills.

The REC report stated: "As awareness grows of the acute shortage of the UK’s availability of, notably, technical/engineering and computer/IT skills – and workers continue to exercise choice over how they wish to be engaged – demand for contingent workers will undoubtedly increase.

"Employers are waking up to the benefits of keeping their core workforces lean and then flexing when they have peaks in demand or they require new specialist skills. It’s also now apparent that more people are choosing to work as agency workers, contractors or freelancers because it fits around their other commitments and interests in life."

For contractors, often an effective way of being matched up with an employer that wants to gain their skills is to go through a recruitment agency. REC said that on any day over the last year, 1.15 million people went out on a temporary or contract assignment gained through an agency.

Over the last 12 months, the record high growth in contractor use has not just been pushed by clients. The report noted that more and more people are choosing to become agency workers, freelancers or contractors as it makes for a better balance with their other commitments and interests in life.

Indeed, Office for National Statistics (ONS) figures show that the amount of people choosing to become self employed has risen to the highest level seen for the past 40 years and is continuing to increase.

Part of the reason for this, an ONS report confirmed, is that people find that being self employed allows them more freedom to arrange their business around other commitments. For example, parents found that they could work their business around their children's school hours or nursery visits.

Chief executive officer of Contractor Calculator Dave Chaplin said that the results of the REC survey are proof that the growth of contractor use is a structural thing. While in the past contractors were often used as temporary cover for people who were absent, Mr Chaplin pointed out that they are now becoming important to the overall delivery model for their clients.

What's more, people with particularly desirable skill sets have found that becoming contractors gives them more choices and benefits than can be gained through employment. For example, many say that if they can gain enough work then becoming a contractor can be more lucrative than working as an employee.

By Victoria McDonnell

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