Will We See A Growth In Contracting As A Result Of COVID-19?

by | Jun 15, 2020 | Blog, Covid-19, Ltd Company, News

Will the contracting industry grow following COVID-19?

There has never been a better time for a growth mindset.

The shocking events of the past few weeks mean that life is unlikely to return to normal anytime soon. There are now stark warnings about the impact on the economy and a global recession looks increasingly certain. This all points to what is becoming the mantra of modern society: embrace change, or get left behind. As much as we were all rooted in our pre-COVID ways of working, there has been no choice but to adapt, making the best of an extremely difficult and unpredictable situation.

It has undoubtedly been one of the most difficult times for our recruitment partners. Two-thirds of APSCo members reported that permanent hiring was on hold by the third week of March and the impact ricocheted into many areas of the contracting sector as businesses sought to cut spending. Only a few sectors like healthcare, IT, and driving have remained buoyant. Construction is in recovery. Recruitment businesses have had to face inwards, with many consultants being furloughed. Firms like ours have had new problems to solve for our contractor and agency partners.

These are challenges. Despite this, we perhaps now have the best opportunity to step back and look at the bigger picture. What will be the lasting effects of COVID-19 on our industry?  How will it change the way companies think about workforce planning and management? What lessons have we learned about flexible, agile working?  How might we embrace technology to help us do things better, faster, and more effectively than ever before?

Whilst nobody has a crystal ball, COVID-19 will very likely be a catalyst to contracting for many people, and smart businesses will be more inclined to think ‘contractor first’ in their hiring and talent strategy. We believe there are three factors driving this trend:

 

#1: The increasing appeal of contracting

COVID-19 resulted in a deluge of workers swapping the office for their kitchen table and a laptop. According to the ONS, just 1.7m of the UK’s 32.6m workforce was home-based in 2019. This figure leaped to 20m (70%) when the lockdown was announced.
 
COVID-19 has certainly served to highlight the fact that so many roles can now be fulfilled remotely using little more than a laptop and a secure connection. Those missing the creative spark and camaraderie of team exchange have embraced Zoom, Microsoft Teams, and other digital collaboration tools in an effort to remain connected.
 
Whilst many have been frustrated by IT issues and lack of space to work from home, others will have found themselves to be more productive with fewer interruptions, and enjoying a commute of nothing more than a few steps from one room to another. Could this be the tipping point to an upsurge in the UK’s contractor talent pool? Time will tell, but we certainly think so.
 

#2: Benefits to business

The second trend likely to emerge from COVID-19 is a greater propensity for businesses to consider contractors instead of, or as well as, FTEs.
 
When preparing for an uncertain future, businesses need to be agile in the way they operate and manage costs. These two factors alone point to a positive trend towards the demand for good contractors and freelancers, as companies look for skilled support without the ongoing costs or administrative responsibility of employment.
 
This would suit the direction of travel in many professional sectors, with studies showing that young, up-coming workers value flexibility over security in their careers. In fact, the CIPD reported that a vast majority – 87% – of employees in the UK would like to work more flexibly. Forward-thinking companies with a non-traditional approach can attract the best talent by looking at how they can successfully combine a permanent workforce with flexible practices.
 
 

“With such a strong pool of talent in our flexible workforce, companies of all shapes and sizes and in a variety of industries have been looking at how they can enjoy stability and agility, backed up by a mixture of employed and flexible workers offering niche talents and skills at exactly the right time. Now more than ever is the time to test the strength of that approach.

 

#3: Digital transformation in workforce planning

Digital transformation is enabling a seismic shift in the way companies plan, hire, and manage their employed and contingent workforce. Here at JSA, we’re continuing our journey to help companies successfully combine a permanent and flexible workforce by embracing technology which aids the cohesive, end-to-end management of the flexible workforce. This is the key to giving hirers the assurance they need around onboarding, assignments, invoicing and payments to enable new and more agile workforce ecosystems to emerge and thrive.
 
Whilst there are certainly challenges ahead, COVID-19 could prove the catalyst for many companies towards greater workforce flexibility and all the benefits that brings, as many had already discovered before the pandemic began. Hopefully, in the next few weeks the virus infection rate will continue its downward trend, lockdown will ease, and we will start to see a degree of normality return. But one thing is certain – the new norm is likely to be very different from the old.

JSA Group

Specialist outsourced accountancy and payroll services for recruitment agencies, freelancers, contractors and umbrella workers. We’ve built up expert knowledge and experience within the industry by supporting tens of thousands of customers for 30 years.

We'd love to hear from you