Contractor Market Likely to Grow

Posted on Friday 4th November 2011 - UK economy

October 2011 was an historic month for the contractor and freelance community. It was of course the month that AWR came into force, but it also coincided with figures from the Office of National Statistics (ONS) that suggested a freefall in the number of people now working part-time in the UK (the statistics showed that there were 175,000 fewer part-time workers in the economy in the three months to August 2011).

Although a link could quite easily be made between these two events, any causal relationship is likely to be minimal. Despite the figures, the prospects for temporary workers in the UK economy still look strong.

There are a number of reasons for the gloomy figures. One is that, as well as AWR being introduced on October 1st, the Default Retirement Age was also abolished. Many of those who work beyond 65 do so on temporary contracts and it may be that employers have been reassessing the benefits of these ahead of the abolition. Secondly, the retail and the public sectors, both large employers of temps, have been particularly heavily hit in recent months, as consumer spending falls and government cuts bite harder.

While these trends are helpful for the freelance and contract workforce, none of them show fundamental structural changes that threaten the longer term viability of working in this way.

There is little evidence that the private sector is using fewer contractors. Indeed, as the government pursues its policy of rebalancing the UK economy, by encouraging manufacturing and exports, the news looks very positive for contractors in the engineering and manufacturing industries.

Airbus’ new plant in Wales, which opened in October, will hopefully be more indicative of the future for contractors, as our focus on advanced manufacturing and exporting increases opportunities across the country.

The fundamental benefits of contracting for both employer and employee still remain. Employers can ‘try before they buy’ (something they’re increasingly doing) as well as continuing to use contractors as a way to fill current needs without long-term commitment. Employees meanwhile will continue to value the lifestyle benefits that contracting can bring while, while others will continue to accept that temporary work is a necessary first step to securing long term work during periods of slow economic growth.    

 Simon Last-Sutton, Managing Director of FPS

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