Are contractors the answer to our dearth of talent?

Despite being halfway through 2022, HR teams big and small are still experiencing the lasting effects of Covid-19, in particular, the concerning skills gap that is hindering hiring teams. Prior to and post lockdown, human resources have been tasked with adapting to the evolving working landscape, in a bid to help businesses locate and secure top talent as the UK’s economic recovery continues. And while the flexibility of the new world of work means that strict location, commuting needs and working times have become less important when attracting talent, candidate availability is a concern. Indeed, as has been widely reported, the latest ONS data revealed that, for the first time since records began, there are fewer unemployed people than there are jobs. So, where does this leave HR teams and what action needs to be taken to ensure stability for not only HR teams and their corresponding firms, but also the UK’s economy?

While the temporary workforce has been steadily growing for some time, there has been a contractor boom since the global pandemic, with the number of adults in England and Wales working for the gig economy now two-and-a-half times bigger than in 2016. And there is certainly an equally high demand for this workforce segment which can be seen in APSCo’s latest Recruitment Trends Snapshot report. Our report revealed that while vacancies declined month-on-month in April largely driven by the holiday period, annual comparisons show a 13% increase in contract vacancies between April 2021 and April 2022, following a 24% year-on-year spike in March.

The daily tracking data outlined in our report also shows that the demand for contract professionals increased in the final half of the month, up 2% when compared to the first few weeks of April. In comparison, permanent vacancies were down by 3%, which is a good indication of the UK’s growing dependency on the temporary workforce as talent shortages remain rife.

In today’s environment this flexible segment of the workforce will continue to prove extremely valuable to HR teams. However, according to APSCo’s own Global Public Policy Director, Tania Bowers this reliance on the flexible workforce could be at risk due to the continued lack of clarity around the Employment Bill:

“The UK’s employment market is not fit for purpose in the current economic landscape and APSCo has warned that the long-awaited Employment Bill needs to be pushed forward swiftly if the country is to recover from the impact of the pandemic and Brexit. It’s clear that the future of the labour market needs to be flexible, dynamic and fair, but current legislation is not designed to support this.

“The self-employed have a crucial role to play in the skills short environment that we are experiencing and ensuring these individuals are adequately supported and able to operate in a flexible manner without being penalised is important. We’re already seeing Off Payroll case law impacting this segment of the market and the UK is at risk of diminishing its own flexible workforce if action isn’t taken. Self-employed status needs to be defined in legislation that differentiates highly-skilled self-employed independent professionals from dependent contractors, workers, other variants of self-employment and the lower-skilled, less independent elements of the gig economy.”

HR teams are already overloaded as they attempt to tackle a combination of the Great Resignation and a continuously expanding gap between the supply and demand of people. While there is no easy fix to these challenges, we can’t ignore the fact that the current labour market is simply not fit for purpose in the modern world and it will remain this way unless the UK’s talent arena becomes attractive and strong once again. As APSCo’s data implies, many hiring teams have been using contractors as a quick – and in some instances, only – fix, however this pool of resources will not last forever. The UK needs a global approach to recruitment that also provides attractive opportunities for flexible workers – something that is yet to be achieved in a post-Brexit landscape. As the trade association for the professional staffing sector, we strongly believe that swift action is needed and we will continue to work with our members and government bodies to ensure the UK doesn’t fall behind in the global race for talent.

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