2021: The year to consider contracting

by | Feb 2, 2021 | News

I’ve been working in the recruitment industry for 23 years and I don’t think any 12-month period has ever inflicted so much change on the ways we live and work as 2020 has. 

There have been three main factors. The first and most obvious is the pandemic. This would’ve created enough seismic change on its own but teamed with changing legislation, such as the countdown to IR35 in April 2021, and the stalling Brexit deal, there is food for thought amongst blue and white collar industries about how the year has shaped our futures. 

Primarily, those who have sadly lost jobs or have been made redundant as a result of COVID-19 might be looking at the steps they can take to find a new way of working. Many will be considering contracting but may be unsure about how to approach it after years of being a permanently employed worker. 

Large infrastructure projects rely on freelance and contractor resource, and these ‘super projects’ can present a strong opportunity for those considering self-employment as their next move. The HS2 project alone will create 30,000 contracting roles in the next three years, while the Hinkley Point C nuclear power station development will require 25,000 freelance roles over the next seven years. The labour requirements span blue and white collar profiles and contractors are required across administrative, legal, finance, IT and marketing roles alongside the expected construction related roles such as project and commercial management, planners, engineers and trades, and labour skilled individuals. 

Contractors account for 5.2 per cent of the UK workforce, contributing £125bn to the economy every year. Those figures have fluctuated across 2020, but – generally – recessions offer something positive for those in temporary roles because employers are keen to minimise risk. As such, they’ll turn to contracting to meet their resourcing requirements and avoid the long-term commitment of engaging with a full-time employee. In recessions companies become very project focused in certain areas especially in times of uncertainty. 

So, what should you consider when it comes to contracting, if you haven’t already explored it as an option? 

As with any form of employment, there are pros and cons. Flexibility is one of the major benefits – whether that’s in terms of the job role or the hours you work. You’re your own boss and you alone can decide which roles you want to explore that fit with your interest, location or family life. That, in turn, tends to improve your work/life balance. Many find that contracting better supports the career of their partner, and enables them to see more of their children. Additionally, contractor and freelance rates tend to be slightly higher than those who are fully employed. 

However, you are reliant on yourself for finding work. You’ll need to develop and nurture your own network, using references and recommendations to secure listing with the right agencies or companies that offer contractor roles. Additionally, project-based work – that which suits lots of contractors – have varying contract durations, some long term others not, so if you find yourself in need of a new job with just a week to spare, you’ll need to call on your network of contacts to present new opportunities to you that are available. 

Contracting requires resilience and strength, and a level of tenacity to get what you want out of it. For example, you’ll need to negotiate your own day rate and it’ll be down to you to ensure you receive what you need without selling yourself short. The agency you work with will be helpful in gauging what the market rates are for your level of experience, so stay close to your trusted contacts. Always consider a higher day rate as an element of assurance for yourself; you won’t receive holiday or sick pay, and you’ll need to set up a pension, so these things must be accounted for in your day rate. 

Consider all the options open to you in terms of incorporating your own limited company or becoming part of an umbrella company who will look after all of your tax obligations. Each route to contracting will require a lot of research, but you can choose whichever best suits your lifestyle

Finally, always bear in mind the role a recruitment agency can play in you being successful as a contractor. These relationships are incredibly important and should be cherished. Agencies are usually the portal of access to clients who require your talent. Treating agencies as a means to an end might see you selected for fewer roles in the long run, as you won’t be front of mind for those filling client resourcing requirements. 

Agencies develop strong relationships of their own with businesses that rely on them; as such, they only want to supply the best talent, and contractors that demonstrate a willingness and passion for their trade. Bring both those things into your relationship with a recruitment agency, and you’ll never experience any downtime as a contractor. 

The best agencies treat their candidates just as well as they do their clients. Candidates are the lifeblood of their business so treating the professionally is a minimum requirement. Equally treat your recruitment partners of choice with the same amount of respect. They operate and work closely with a lot of clients that you potentially want to work with so keep yourself at the front of the queue.  

The last 12 months has taught us that the future will always be unclear. For those who’ve always been interested in contracting but have associated it with uncertainty, now might be the best time to alter your mindset. There are a huge number of benefits to this way of working, many of which will lead to more positive outcomes on your wellbeing and financial situation than full time employment ever could. A lack of clarity doesn’t have to mean a lack of control, and contracting puts the control back in your own hands. 

Useful Links

Different types of employment options:

https://parasolgroup.co.uk/help-me-decide/faqs/employment-options/

Top things to know/prepare before moving into contracting and self-employment:

https://www.contractorcalculator.co.uk/10_tips_first_time_uk_contracting.aspx

Stats on contracting pre and post COVID:

IPSE (the Association of Independent Professionals and the Self-Employed) is at the forefront of research into freelancing and self-employment. It works with members, leading academic institutions and research agencies to shed light on the needs and interests of freelancers so that it can champion them in Government and across industry.

Freelancer Confidence Index hub: 

https://www.ipse.co.uk/policy/freelance-confidence-index-hub.html

What does the future look like for contracting?

https://www.ipse.co.uk/event/contractor-trends-in-2020-what-can-we-learn-for-2021.html

Why not check out our webinar with Rhys talking through the advantages of contracting?

https://www.keepbritainworking.com/webinar-contracting-self-employment/

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