Over the years, I have seen problems within contract recruitment, and it left me wondering if this is the death of temporary hires.

With over 11 years of experience at Principal People, specialising in HSEQ contract and interim recruitment, I have encountered a wide range of situations. To say that I have seen it all, simply wouldn’t do it justice.

Only 5% of people in the UK are employed on a temporary basis, which is hardly a large field of job seekers. As you can imagine, this can come with its issues when finding the right professional in such a niche talent pool. But statistics aside, I want to explore with you what I feel are the reasons that it could be the end of contract recruitment…

IR35

The introduction of IR35 has brought significant challenges to contractors. Working inside IR35 means sacrificing tax benefits and receiving the same salary deductions as a permanent employee. I wonder if the introduction of IR35 reduce the number of contractors?

Operating through your own limited business allows you to have benefits such as being taxed at a lower rate, your own pay withdrawals determined by you, and the option to use your limited business for other ways of being paid. This is not always an option when taking on a contract role. Through speaking to my network, it is more common for people to want to operate outside of IR35 but not all opportunities mean that this option is available.

Stability

Throughout my years of experience, I have seen the market's highs and lows. Recently, I have seen a decrease in the length of contracts and businesses choosing FTC (fixed-term contract) over temporary hires. FTC guarantees employment, but contracts can be stopped with as little as a week's notice.

Job security and stability may not be a contractors' priority, but in 2020 alone, over 60% of UK workers didn’t feel their jobs were secure. The fear of the unknown and not knowing what is coming next can really affect the professional life of a contractor. The stability of someone’s role can make them choose a permanent job or even FTC, as the prospect of job security could be seen as a  ‘comfort blanket’.

All of this boils down to one thing - If their personal lives change or they need to prioritise security, they will eventually change employment type. Ultimately, it goes hand in hand with reducing the number of contractors.

Cost

Cost of living. It is all over the news and affecting each and every one of us. Have you thought about how sky-high prices are affecting your employer? Maybe. Have you thought about the price of keeping your employer's business running? Probably not.

Admittedly, it isn’t your first thought, but I wanted to bring to light how this could affect you. I have seen employers move away from hiring contracted employees or renewing existing contracts due to the cost.

Shifting from contract recruitment will cut an employer's cost, and in the current economic climate, it’s not always viable to pay the average contractor day rate (£350 to £450 a day).

Competition

All of the previous factors contribute to a bigger picture. With fewer opportunities available, seasoned contractors are finding it harder to secure a position as they are up against a larger pool of candidate competition.

Despite needing a strong career and experience behind you, just like any job, you aren’t the only applicant. Now more than ever.

Final thoughts

I wanted to share my insights with you and speak about the struggles of the current hiring market.

I know there will always be ups and downs in an industry, but after over a decade of experiencing it first-hand I am still to see the end of contract recruitment. There will always be modern-day threats, but I can strongly say this isn’t the end.

If you have any questions about contract positions, please feel free to contact us for a confidential, hassle-free consultation.