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3 contracting lessons learnt in 2016

Paystream News

Kerry Hull

Friday 25th Nov, 2016

The year is beginning to draw to a close, providing us with the opportunity to reflect on 2016. It's certainly been an eventful year, with the EU referendum here in the UK, the presidential election across the pond in the US and barely a week going by without the sad news of another celebrity's passing.

So, what have the past 12 months taught limited company contractors and freelancers working in Britain? Here are three lessons we think all workers should take away with them as we go into 2017.

1. Brexit has been good for contractors

The UK's decision to leave the EU has undoubtedly been the biggest story of the year. The result of the Brexit vote took many by surprise, with businesses naturally panicking about what the move will mean for them. Initially, there were fears among contractors that there would be no work for them if Britain chose to leave Europe, but survey results published since the referendum in June indicate that the outcome has so far proved positive for the self-employed.

For instance, figures from the Association of Professional Staffing Companies (APSCo) for August 2016 showed a significant increase in the number of opportunities available for financial services contractors, as many businesses look to get their affairs in order before Article 50 is triggered by the government. In comparison to August 2015, a year-on-year increase of 16 per cent could be seen in the data.

What's more, although there were initial dips in opportunities for contractors following the announcement that a Brexit will indeed be taking place, hiring in most industries has now stabilised, indicating that the post-EU jobs market will not be as bad for contractors as was originally feared.

However, prime minister Theresa May will not be triggering Article 50 of the Lisbon Treaty until early in 2017, so workers and organisations alike will have to wait until then to see exactly how Brexit will impact opportunities.

2. The skills shortage is at risk of becoming a chasm

Another key lesson learnt during the course of this year is that the UK's skills shortage continues to worsen, and is, in fact, at risk of creating a potentially irreparable chasm.

Upon the release of the Hays Global Skills Index 2016, the organisation's chief executive Alistair Cox stated: "The skills gap is fast becoming a skills chasm."

With businesses competing for access to skills and more companies willing to offer higher prices for this talent, the landscape has the potential to turn divisive.

However, limited company contractors are in an ideal position to prevent the skills shortage from becoming a chasm, offering their skills to clients for short-term periods, educating staff while they are there in order to add long-term value. They can then move from company to company adding the same value, helping to stop industries from dividing, particularly as it is arguably now more important than ever for UK firms to work together to navigate the post-Brexit market successfully.

3. The UK couldn't survive without contractors

The third lesson we're taking away from 2016 is that the UK simply could not survive without the extremely valuable work that contractors and freelancers carry out every day.

A report published by the Association of Independent Professionals and the Self-Employed (IPSE) towards the start of the year revealed that contractors contribute £109 billion towards the country's economy each year.

The research was written in conjunction with Kingston University London, with the university's Professor John Kitching commenting: "Freelancing continues to be an important contributor to the UK economy. Independent professionals are operating in all sectors of the UK economy: men and women, young and old, throughout the UK.

"It is clear that freelancer numbers are resilient to changing economic circumstances. Freelancing offers a valued form of working to those supplying their services on this basis, while also meeting the needs of end-users in many industries."

The report also found that there were 1.91 million freelancers operating in the UK as of the end of 2015, marking a rise of more than one-third (36 per cent) since 2008.

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