Factors including the UK’s recovery from COVID-19, an ongoing labour shortage and the impact of IR35 on the self-employed workforce are being cited as reasons behind sharp increases in demand for contractors in sectors including construction and IT.
Data from the Office for National Statistics (ONS) showed that vacancies in the construction sector rose to their highest figure since records began in 2001 last month, with 43,000 vacancies reported. This was an increase of 5,000 from August’s figure.
Meanwhile, in the IT sector, the Recruitment & Employment Confederation (REC) reported similarly strong demand for contractors. Despite a slight decline from August’s score of 70.8, the REC reported that demand remained strong, with a score of 68.9.
The REC says that the jobs market in September was driven by “fierce competition” for temporary and permanent roles. Demand was said to have risen due to labour shortages and the decline in the self-employed workforce due to IR35.
One study found that IR35, which was introduced for private sector firms in April, has led to more than half of the UK’s freelancers (56 per cent) saying that they plan to turn to permanent roles. The majority said that the main reason for leaving was due to an anticipated drop in take-home earnings as a result of the rules.
Commenting on the jobs market figures, Neil Carberry, CEO of the REC, commented: “Businesses’ confidence levels remain robust and that has led to sky-high demand for workers. Demand is still growing for both temporary and permanent staff, but permanent hiring now leads the way after starting its recovery much later than for temps.”
