Exclusive research into the jobs market has revealed that contractor placements increased last month despite the imminent introduction of the IR35 reform.
The data, compiled by staffing association REC in collaboration with KPMG, showed while growth in temporary placements had eased to a seven-month low, businesses continue to rely on temporary workers to navigate the pandemic.
Neil Carberry was cautiously optimistic saying:
“Given the national lockdown that has been in place for the past two months, the labour market has coped remarkably well. Permanent placements have only fallen modestly, while vacancies and candidate availability have stabilised."
“Meanwhile, businesses have continued to use temporary work to help them through this tough period. We are well-positioned for a recovery as restrictions are lifted – but both businesses and workers will need help to do so.”
IR35 looms
The rise in temporary billings in February comes at a time when contractors are preparing for the arrival of IR35 reform on 6 April, which Chancellor Rishi Sunak chose not to address in last week’s Budget.
With the introduction of the changes now certain, there is a real concern for what the future may hold.
A research piece was conducted by IGA last month on the thoughts of professional services contractors on the upcoming IR35 changes. You can find more information on that here. https://igatalent.com/about/blog/the-impact-of-the-ir35-reform-on-professional-services/
Rates stable but a ‘long way to go’
The UK Report on Jobs also highlighted that fees commanded by freelancers and contractors remained “broadly stable” last month, following a “slight drop” in January. Additionally, open roles for short-term workers were said to have risen “strongly” across both the public sector and private sectors, the latter of which is bracing itself for IR35 reform.
The immediate future
Looking ahead to the road to recovery, according to KPMG’s Vice Chair, James Stewart, “there’s a long way to go to rebuild confidence in the UK jobs market”, but “reason for optimism for the UK’s future workforce.”
All in all, this report highlights some positivity in the contractor market for the year ahead. A most welcome change and long may it continue
