Third of businesses say they are more likely to hire contractors this year

Just under a third (32 percent) of UK employers plan to hire more contract workers this year, according to a new report [registration] from recruitment company Robert Walters. Over a quarter (29 percent) report being encouraged to do so by the upcoming IR35 offset rule – coming into effect in early April. Not only that, but a January report from KPMG & REC found that demand for temporary professionals continued to increase softly across the private sector towards the end of 2023 – boding well for this year’s hiring.

Despite over a quarter (29 percent) of employers feel the upcoming offset rule will encourage them to hire for more contract roles this year – 2 in 5 feel unsure on the upcoming rule and how it will impact their business.

From April 6, the new offset rule will allow HMRC to offset the taxes already paid by the contractor against the PAYE tax liability they claim from the fee-paying client (usually recruitment agencies or end-clients) – in essence, eradicating the risk of double taxation for employers.

Lucy Bisset, Director of Robert Walters UK comments: “In the wake of tighter budgets, headcounts being streamlined and other cost-cutting incentives – we’re seeing employers increasingly turning to skills-based temporary hiring.”

Within IT, job advertisements for contractors with skills in DevOps and Project Management has increased a third (+33 percent) on the same time last year. Whilst in Finance and Accounting, job ads for contractors with skills in Business Analysis have seen a +25 percent increase.

A quarter of employers stated issues with compliance and regulations as a key challenge to hiring contractors this year. Whilst just over two-fifths (41 percent) cited issues with sourcing skilled contractors as the main challenge.