Calling all Contractors!! The most under-appreciated element in today's economy

In a year which has had the potential to significantly disrupt our lives, in a way not seen for generations, 2020 is also having a real impact on contingent workers. The skills and capabilities they provide to organisations (especially in our field of expertise; technology and change), make them a vital cog in their ability to deliver business outcomes for their customers.  

With the, arguably, limited support provided to contingent workers by Covid-19 relief measures, we’re also seeing a market back-drop of declining day rates– C25% according to the UK’s largest association for the self-employed, IPSE (https://www.ipse.co.uk/ipse-news/news-listing/freelancers-devastating-25-drop-income-lockdown.html). 

Competition for roles has significantly increased, whilst the number of contract opportunities has significantly reduced (The Association of Professional Staffing Companies, APSCo, reported a 30% decrease in August year-on-year.)  It would be easy to understand why 2020 has been regarded as a tough year and is unlikely to get improve quickly. 

What else is causing disruption? 

·  We again have IR35 bubbling away in the background. For the past five years we have had a constant 'will they/won't they' battle with HMRC looking to introduce the legislation changes. Now, with a further delay of the legislation being rejected, it looks like all systems go for IR35 in April 2021.    

·  You might think it's not a good time to be a contractor in the current climate. But then is it worth considering:  With most recessions, the reliance on the contingent workforce typically increases. We saw this in 2008 with the global financial crisis. While this recession might feel harder, the ability for companies to quickly pivot, accelerate projects and services ,and scale with agility will increase demand for the skilled, flexible labour market. 

·  One of the important considerations for an IR35 status determination is supervision, direction and control.  However, with current remote working practices being enforced on us by the global pandemic, there’s a case to be made for reduced interaction with the end-client, more autonomy in working and less integration. Is it now easier to build the case for less control of the resource/contingent worker, therefore determining more roles to be 'outside', compared to our “old” world of working?  

·  Can this also be applied to Right of Substitution? If contingent workers are less integrated as part of the wider team, will it now be easier for an end-client to accept substitution on projects, as long as the outcomes are delivered? (And the substitute is as equally skilled to deliver the outcome of course!)  

·  Will organisations still undertake a risk-adverse approach to de-risk their contractor population? Unclear and ambiguous information provided by HMRC may only hinder the situation.  

·  Finally, do organisations (end-clients) do enough to look out for the welfare of their contingent workforce and could more be done to support this?  

There is a lot to debate, and we want to hear from you. 

We have pulled together a short pulse survey to gather sentiment from the contingent workforce and would certainly value your time and input into the research.

All the best.  

Will Jones

Director -  Harvey Nash Workforce Solutions