The UK contractor market has been growing at such a pace that the number of contractors has increased by 550,000 since the recession and forecasts suggest that by 2018, the number of contract workers and freelancers will surpass the number of people employed in the public sector.
These findings, which were published by the think tank RSA, are supported by the Economic Modeling Specialists International (EMSI) report, which looks at employment from more than 500 industries. Published in May, the report found that temporary/contractor employment levels in the UK increased by 13.8% from 2011 to 2014, compared to just 2.5% of total employment.
As it stands, the level of contractors, be it Umbrella Contractorsor Limited Company Contractors, is at an all-time high of 2.37 million and accounts for 15% of the UK’s workforce (Office for National Statistics). When compared to the rate of overall UK employment growth, the growth of contract workers is currently six times higher and this trend is set to continue until at least 2015.
With the UK economy on the upturn and a surge in the number of new job opportunities being created rising steadily, life as a contractor has never been better. So what is causing this growth?
At One Click Umbrella, we believe there are a number of key factors. One reason is that redundancies were rife during the economic downturn and many people carved out new careers for themselves, working as independent contractors. Another major reason has been the seemingly greater financial rewards to be gained as a contact worker, rather than an employed worker.
Indeed, the salaries being offered for these roles are invariably higher, with the top contractors in the UK are earning on average treble the annual average of £27,000, according to a nationwide survey conducted by Professional Representation Network.
For many key roles, largely as part of a change management process, recruiters who specialise in filling senior executive roles are increasingly finding that they are being called upon to dip into their contractor talent pool to help their clients fill key positions on a contract basis, rather than recruiting permanent employees for the most highly skilled and best paid roles.
The sectors that are performing particularly strongly, from a contractors perspective, are teaching and childcare (both +5% in the last 12 months) followed by health and welfare (+4%). At the same time, a lack of skilled labour in other key sectors, such as oil and gas, engineering, logistics and IT will continue to fuel growth in demand among the contract worker community.
As demand continues to grow in these sectors and the UK economy becomes increasingly more specialised in certain areas, such as IT and engineering, contractor earnings will invariably continue to outperform those of employed workers.