Did you know that Britain’s temporary labour market is worth a whopping £35 billion to the UK economy? An estimated 1.6 million people currently work in temporary roles, from agency workers to contractors – this equates to almost 5% of all employees. It’s a very important part of the labour market and, in terms of the recruitment industry, the temporary recruitment market is worth more than double that of the permanent recruitment market.
With temporary recruitment equaling big business, it’s great news for the UK economy that the sector is experiencing rapid growth, both in terms of stimulation and the unemployment rate.
There were estimated to be almost 1.54 million temporary workers in the United Kingdom as of February 2021 compared with just over 1.46 million in January 2020 – a 5% increase year on year. As the UK business outlook improves as the government continues to lift lockdown restrictions, there has been a further surge in demand for temps and contractors so UK plc can rapidly respond to changing market conditions.
Employers intend to hire more temporary employees
The latest research into recruitment industry trends by the REC shows that employers’ intentions to hire temporary workers jumped in the three months to March 2021 as lockdown measures were lifted.
The latest Jobsoutlook Survey indicates that hiring intentions for temporary workers in the short and medium-term rose to the highest levels seen in three years. This shows that temporary workers are helping businesses to respond rapidly to the changing business environment, manage risk, make changes to their business models and scale up in terms of great uncertainty.
The flexibility offered by taking on staff on a temporary or contract basis allows businesses to gain fast access to skills and knowledge, without the long-term financial implications of taking on permanent members of staff. This can be a lifeline to businesses as they navigate the rapid change we are all experiencing.
Neil Carberry, Chief Executive of the REC, said regarding the findings: “For the past few months, firms have been getting more positive about their prospects, but have been more cagey about the broader economy. This data shows that confidence is spreading more widely now – and it is feeding through to hiring in a much more substantial way. That is great news for investment and jobs. The challenge now is on skills and career pathways, as we help people towards growing sectors in the post-Covid economy. Recruitment firms have a key role to play in helping with this – if government sets skills investment free by reforming the apprenticeship levy.”
“It’s no surprise that this report shows the value of agency work – it is a huge benefit to the UK, getting people into work quickly and helping businesses hire in uncertain times. As our Recruitment and Recovery report showed, it’s time to champion the sector. We’re looking to government to support the flexibility and opportunity that agency work provides, while working with us on setting high professional standards, especially in the upcoming Employment Bill.”
Contract roles as popular as ever despite IR35
When IR35 finally took hold last month, many had anticipated a freeze in contract roles as firms feared getting it wrong and racking up huge tax bills. As businesses become more au fait with whether a role is inside or outside IR35, and with solutions now in place for contractors who can join agencies in order to circumvent the often confusing regulations, it’s clear that businesses are not as turned off contract workers as predicted.
IT contract roles are increasingly available
Within the IT sector specifically, whilst advertised contract roles are not back to the levels we experienced in 2019, ITJobsWatch shows that IT contract roles calling for professionals with skills like agile software development, and FinTech experience have almost doubled since this time last year. Median day rates, as well, are increasing on the whole, showing that not only are there more contract roles but that the value attached to them is also growing.
At Intec Select, both our interim and permanent divisions are booming, and just about half our current live vacancies on our website at the moment are contract or temporary roles. There’s this great misconception that temporary or contract positions are the poor relation of the security and stability of permanent roles. We regularly see people who much prefer the flexibility that temporary positions can offer. This preference may exist for a variety of reasons including caring responsibilities, side hustles and itchy feet. Over the last year, as entire professions have seen their workers displaced in the job market, there’s been a new appreciation for the gig economy and the flexibility it can provide both sides of the jobs market during periods of flux and uncertainty.
Take a look at our current live contract vacancies.