Brexit and NLW could be good for contractors

Tuesday 10 May 2016

One of the most hotly talked-about issues in the UK at the minute is 'Brexit' - the upcoming referendum that will decide whether or not Britain leaves the EU. In the business world, there is another issue on people's lips: the National Living Wage (NLW), which came into effect on Friday (May 6th). Both of these could have far-reaching implications for contractors, many of which will be positive.

This is the conclusion that job search website has come to, as it has recently published its monthly UK Job Market Report. The site found a number of interesting facts about how businesses are reacting to both Brexit and the NLW, many of which will be useful for contractors to know.

First of all, business confidence is falling as few people can predict what will happen as a result of Brexit and NLW. The response of many companies has been to ease off on hiring new permanent staff.

Several sectors saw a fall in the number of vacancies between February and March. Both logistics and warehouse vacancies, and retail vacancies dropped by seven per cent during this period. Similarly, customer services vacancies fell by five per cent and manufacturing jobs by three per cent.

Furthermore, salaries for permanent jobs are shrinking. They rose by just £15 between February and March. This is a drop of two per cent compared to the same period of 2015. Between January and February, permanent salaries rose very slightly, by just 0.6 per cent. This in turn makes permanent jobs less attractive compared to freelancing.

So what does this mean for contractors? Well, a lack of business confidence does not necessarily correspond to a lack of business. While firms are not hiring as much, due to not knowing what Brexit and NLW could mean, they are still receiving just as much work. Without increasing permanent staff, this might mean turning to contractors in order to complete projects.

Adzuna's co-founder, Doug Monro, said: "Recent reports indicate hiring permanent staff may be being put on pause until after the EU referendum as employers turn to temporary workers to fill gaps. Predictions of risks to jobs and the economy show how vulnerable the employment sector can be to wider economic change."

By Victoria McDonnell

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