Opinion: Why contractors can look ahead with some confidence

The labour market is pretty bleak at the moment, with UK unemployment standing at 2.69 million as of November last year.

With many businesses having to cut budgets and streamline their workforces, however, some are considering hiring contract workers instead of permanent staff. So what are the real benefits to hiring on a contract basis?

The recession caused many IT implementation projects to be put on hold, but as the economy stabilised, these projects were reinstated, driving demand for skilled staff. 

Many employers are now struggling to find people with the expertise to fill these vacancies in the face of ongoing shortages in technology skills. 

This increase in the number of organisations looking to carry out project-based work has done much to drive up demand for contract staff. Many organisations are also recruiting contract staff to support them while they look for permanent positions – a practice known as “back fill”.

The main advantages of using contract staff are flexibility, reduced costs and simple scalability, which help organisations manage their budgets more effectively. However, there are issues that must be considered before recruiting contract workers.

When contract staff come to the end of their contracts they take their skills and knowledge with them. There is also the issue of HR continuously having to recruit and hire new workers on a project basis, which can prove time consuming.

It can be difficult for contractors to develop and progress their career. They are often only employed to carry out a project at the level they have most experience, which is more efficient for the employer. 

Contract workers do, however, benefit from the diversity and flexibility of working with a variety of organisations and in a variety of different roles. This provides a substantial amount of valuable experience.

Flexible or “liquid” labour is crucial to a nimble and flexible economy, enabling recruitment, candidates and employers to be more adaptable in meeting demands as they arise. 

Recruitment very much depends on how employers perceive the broader economy, which also determines how willing they are to invest in bigger projects where the majority of contract work is required.

And when the economy begins to recover, the demand for skilled staff will increase, and contract will prove to be the fast fix, as it offers the liquidity the economy will demand.

 Scott West, managing consultant, Acumin Consulting