How Brexit will affect Contract Recruitment

Usually, contractors are taken on to fulfil initial projects that are then inherited by permanent members of staff. However, due to the brewing skills gap storm from the effects of Brexit, many predict that contractors will begin to satisfy permanent staff duties, thus increasing their importance.

This is magnificent news for existing contractors and it will also encourage permanent members of staff to make the transition to contracting. To gain a competitive advantage, businesses should begin to consider taking on contractors now, in the calm before the storm and adjust their internal approach to contractors to adapt to market changes in employment.

Is the price of contractors worth it?

For example, a £350-day rate cost of contractor is a price many employers initially deem as expensive. However, looking closer at it, the comparable figure to permanent daily cost makes it an option.

The main cost benefit to employers is the saving in NI contributions and pension, which companies do not have to pay limited company contractors. Looking at a c£50k per annum permanent employee’s daily breakdown of around £190 per day, this already adds on an additional £35 per day to employers.

Others costs savings include the number of benefits that permanent staff members receive from the company in comparison to contractors. When taking on permanent employees it is a given that they must provide their new employee with costly investments like training, equipment such as laptops and phones to do the job, admin resource for offers and onboarding, and then any cost to the business from holidays or any sick days. Contractors don’t receive any of these added benefits, making the cost gap between a contractor and a permanent member of staff much smaller than it may appear and these are only the tangible costs. Contractors also bring a wealth of experience and an entirely different perspective to a business, which may benefit the organisation massively, like a range of recent experiences from past or current roles or the latest ways to deal with the issues they may be having. Many can bring new software ideas and insight that can add commercial value to their proposition.