Now is the Time to Become a Contractor
The last quarter of 2013 was greeted with the welcome news that there is light at the end of the recession tunnel for Britain. Parisian Thinktank, The Organisation for Economic Co-operation and Development, predicts that although the world economy is still sluggish the British economy will improve a reasonable amount in 2014 due to greater investments and more household spending. Throughout 2014 the UK economy could grow as much as 2.4%, meaning more money, better job prospects and stronger industries. This is optimistic for people in any profession, but for contractors in particular it signals more opportunities.
There have been reports of increased workload and increased intake of contractors in various different industries, particularly in the IT and engineering sectors. The Recruitment and Employment Confederation has reported that in October the demand for IT contractors reached a two and a half year high with an index score of 62.9 when it stood at a score of 52.5 a year ago. The rise in IT contracting could be due to the awakening economy, and companies who wish to develop their computer systems feel they can now afford to do so. Companies are opting for temporary workers to carry out short term projects that will enhance their businesses.
November 2013 saw a six year high in engineering contractors, particularly civil engineers, and this is set to rise further in 2014. 54% of engineering contractors are claiming they are seeing a greater workload than last year and are finding it easier to secure contracts. The rise in engineering is partly due to the Government’s investment in large scale projects that are set to improve transport and energy such as the Heathrow airport expansion, growing energy industry and the HS2 rail link. There is a danger of a skills shortage in the engineering sector as skilled engineers tend to be from older generations; companies opt for short term solutions and entice contractors with generous pay.
As well as increases in contractor roles seen across many industries, 2013 has also seen a welcome rise in the amount of women opting to be contractors. Women aren’t generally associated with contract work as they don’t favour an unstable work load. However a new survey by Crunch Accountancy has found that women in freelance and contractor roles has risen by 21% in the past five years. A few reasons are cited for why women are opting to set up their own Contractor Limited Companies: firstly the instability can also be viewed as flexible, which means women can tailor their contracts around their lifestyle, secondly the pay is much better, and thirdly, women believe it is easier to progress in a career as a contractor than achieving higher ranks in large businesses.
As the economy slowly picks itself up, many companies are opting to pay for contractors as a temporary and highly-skilled staffing solution. The economy is neither stable nor reliable, and while people watch to see how the growth progresses, companies get their projects well underway using contractors. The financial benefits are mutual both for industry and contractors: by employing a freelance worker, a business doesn’t have to provide sick pay or holiday pay and contractors with their own Limited Companies are often able to demand a higher contract rate thereby increasing their take home pay. 2014 is set to see further increases in contractors as industries grow and companies look for highly skilled workers. Could this year be the year you also take to the contracting path?