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10 predictions on the future of contracting

10 predictions on the future of contracting

As the shape of the global workforce changes to reflect business evolution and lifestyle aspirations, the contracting world is set for change. From a number of studies, what’s clearly corroborated is that contracting has an increasingly fundamental role to play, both in facilitating economic growth and in giving people the freedom to prioritise what they most value. In this article, Contracting Scout looks at 10 major trends that will affect the future of contracting.

 

  1. Emerging technology such as AI and blockchain are creating disruptions to industry across every sector. Businesses are using this technology to create new products and evolve their services to reach new markets. As some companies enter a phase of ‘hypergrowth’ they are increasingly turning to independent contractors to meet their urgent recruitment needs. The competition for businesses to secure access to expertise will create a sellers market for contractors who can fill this skills gap.

 

  1. The impact of the 4th industrial revolution will affect the global workforce. These changes will also affect independent contractors according to their skill set. Those with specialised knowledge will be most in demand, while some manual work could be overtaken by automation. For example, within ten years it’s expected that most cars will be self-driving, while mid-level administrative tasks will be performed by computers or ‘cobots’ – robots that will work alongside people to perform more routine tasks that can be programmed into machine learning.

 

  1. As the demand for independent workers increases, legislation around worker classification will need to evolve in order to protect both contractors and hiring organisations against compliance risks. The current issues with the off-payroll rules and changes to IR35 have highlighted the inadequacy of current legislation. The misclassification of contractors and the subsequent consequences has negatively impacted the contracting sector. Steps to protect and support contractors and their hiring organisations through improved legislation will need to be taken.

 

  1. As the demand for contractors grows, contracting will be identified as a career choice at an earlier stage and this will be reflected in the education system. Research indicates that by 2025 over half the workforce will be independent at some point during their careers. The generation currently in education will have a far higher percentage of independent workers and contractors than previous generations. This is because they have been computer literate from an earlier age and will have the technical skills that are in demand.

 

  1. Investment in lifelong learning will be a future trend for contractors, as many contractors ‘skill proof’ their careers against advances in technology and growing competition. Contractors who can either diversify their service offering or provide niche skills will strengthen their access to consistent, well-paid work. Rising popularity in contracting will see many people intermittently returning to long or short term educational programs to retrain or develop their skills.

 

  1. The increasing globalisation of business will see organisations competing internationally for talent. This means that contractors are likely to become increasingly mobile based on market demand. Many contractors will travel further afield to work on projects, while there will also be a large increase in remote working as technological changes make this a more secure and reliable option. The international competition for contractors could also result in higher earnings and greater choice. However, legislation surrounding international travel and work visas will be needed to support independent contractors, most urgently in the wake of the UK’s planned departure from Europe.

 

  1. Although direct networking and hiring through platforms such as LinkedIn will see growth, the role of recruitment agencies in facilitating supply and demand within the contracting sector will remain crucial. This is because contractors are mostly employed for their specific talents, rather than to fill a labour force ‘gap’. Identifying high value clients who are able to provide quality contractors with the right opportunities for career growth will ensure that the recruitment sector remains competitive. Technology such as AI, which can employ specific selection processes based on a client’s needs or a contractor’s preferences, will also help to reduce risk in the hiring process.

 

  1. Contracting will continue to attract more people based on lifestyle choice. The flexibility of contracting allows people to negotiate the amount they work and how they work. People can choose contracts based around their primary concerns, whether this is family, professional training or the desire to maximise their earning potential. This means that contracting is more likely to accommodate and reflect people’s core values and motivations, leading them to experience greater career satisfaction.

 

  1. The fact that people will turn to contracting in order to pursue work that interests and rewards them could mean that contractors are more likely to keep working beyond retirement age. Although contractors can choose to reduce the amount of work that they do, as long as their knowledge stays up-to-date, there’s no reason why they can’t keep working as long as they’re willing and able to.

 

  1. With the increase of bigger and more complex projects, it’s likely that some contractors will team up to get maximum results. The competitive value of contracting often relies on pulling the right team together to work on a particular project and some contractors will turn to subcontracting or temporary partnerships in order to represent the full range of talent needed for a project.

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