Contractors may be set to dominate the UK jobs market, new research suggests. Predicted to make up some 50 per cent of the nation's employment market by 2020, contractors are becoming increasingly valued by small businesses as cost-efficient, skills-rich options for bolstering the quality of their output.
The rise in the contractor culture
The research, which was conducted by PeoplePerHour, revealed that the self-employed labour market is growing faster than any other sector in the UK at an impressive rate of 3.5 per cent per year. If this trend continues, then by 2020, half of the country's workforce will operate on a freelance basis.
This represents a significant shift since the recession. Indeed, the economic downturn can be considered one of the key driving forces behind the change, as businesses - particularly SMEs - look to improve efficiency and reduce costs; both are tasks that contractors can play an integral role in.
What has caused the rise in contracting?
There are multiple facets to the growing contracting workforce. Using freelancers allows businesses not only to pay just for individual pieces of work they need doing, as opposed to having to take on new full-time employees to deal with additional workload, but also to access specialist, niche skillsets that their own workforce may lack.
These niche skills have had their own part to play in the rise of contracting. In recent years, many specialist occupations have been breaking down into increasingly niche areas of expertise, and it is access to people who possess this expertise that is, in part, driving the thriving contractor sector.
The increase in contractors can also be partially attributed to the attractions of freelancing. Allowing specialists to design a work-life balance that suits them, as well as set their own rates and select their work, freelancing empowers individuals to create a career tailored specifically to their needs and preferences.
Becoming a limited company contractor
If you want to work entirely independently, you can do so by becoming a limited company contractor. This means however that you will be responsible for the admin that comes with running a limited company, however there are services, such as PayStream My PSC service that can assist with this.
There are many elements to consider when making the transition to contracting. These can broadly be thought of in terms of generating income, managing your finances, and maintaining a work-life balance.
The first two are likely to be your primary concerns when starting out - after all, making business connections in order to secure work and ensuring your fiscal affairs are in order are the cornerstones of any successful contractor. Achieving a healthy work-life balance is often a key contractor goal - but one that will naturally take a back foot as you take those first steps into going it alone.
Tips for making contracting easier
Making the change from a nine-to-five job to contracting work can be a little daunting - especially in the beginning. However, there are a host of ways you can make the transition, and your life as a contractor, much easier.
- Use an accountancy service provider
If you choose to set yourself up as a limited company contractor, one of the biggest headaches for any new (or experienced!) contractor is maintaining proper financial company records and correctly calculating tax and national insurance contributions. While it's possible to manage all of this yourself, that time could be better spent winning clients and creating high-quality work that will bolster your reputation.
So, you could engage the services of an accountancy service provider such as PayStream. Our My PSC service will assist you with all of your company admin, provide proactive tax advice and planning and we'll even give you access to your own team of dedicated accountants working on your behalf, plus much more.
Alternatively, if you like the sound of support in this area but would rather make your own company transactions yourself, why not try PayStream's My PSC Online service? This online accounting package provides your essential accounting needs, while allowing you to make your usual bank entries and day-to-day invoicing through our online portal.
- Harness the power of social media
Technological developments are making freelancing easier than ever. It's now perfectly possible to meet new clients, make business connections and conduct meetings all from the comfort of your own home. Perhaps one of the biggest breakthroughs in terms of finding contacts is social media.
LinkedIn is one of the best social media platforms for contractors to use. Giving you a virtual stage to show off your skills, it allows you to make connections with businesses and recruiters in your field of expertise, as well as other freelancers. It also gives them an opportunity to find you!
Being such a powerful tool to increase your contracting connections and win work, your LinkedIn profile deserves a lot of attention. Take the time to make sure you have a complete, professional-looking profile accompanied by a suitable photo. Make sure it includes industry keywords (as recruiters and potential clients often search for contractors using these), as well as making it clear you are a contractor and immediately available for work in your profile headline and summary.
- Set your working hours and take breaks
When you first step out of traditional employment and into the world of contracting, it is easy to spend increasing amounts of time working - especially if you work from home. This is partly because you have no set working hours, and partly because you will be very conscious that your earnings are reliant on your own actions and motivation.
However, overworking is just as unproductive as working too little, as you will soon run out of steam. So, try to set yourself working hours - even though no-one will be checking you stick to them! And remember to take regular breaks.