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Hiring Boom Boosts Day Rates and Contractor Confidence

Hiring Boom Boosts Day Rates and Contractor Confidence

New research by IPSE shows that self-employed earnings and confidence in the economy made a “remarkable recovery” in the first quarter of 2021. Supported by another study, by the REC, the latest figures show that freelancers and contractors average quarterly earnings are up an impressive 20 percent from the end of 2020. Meanwhile, contractor’s confidence in the economy is growing as the country comes out of lockdown.

The IPSE says the rise was due to an increase in both day rates and the amount of work undertaken at the start of this year. The number of weeks contractors and freelancers went without work dropped from 4.3 weeks to 3.7 weeks. Although it’s not quite back to pre-pandemic levels, day rates saw the highest uplift (£445 on average) since 2019.

Andy Chamberlain, Director of Policy at IPSE said, “The roadmap to opening up the UK has driven a remarkable recovery in freelancers’ earnings and also their confidence in the economy. Economic confidence among freelancers is in fact now at its highest level since before the EU referendum in 2015. After a dark year in which they were disproportionately hit by the financial impact of the pandemic, freelancers are again seeing cause to hope.”

The latest KPMG/ REC Report on Jobs also revealed that last month temporary billings expanded at the quickest rate since November 2017 as hiring boomed. While businesses need to press on with bounce back projects, uncertainty around the economy means that contractors provide the logical solution. In particular, demand for IT contractors rocketed in March, along with high demand for construction workers and medical locums.

Despite the largely positive news, IPSE’s Confidence Index showed that, for the first time since it began in 2014, freelancers have less confidence in their businesses than in the economy. The REC/KPMG survey also showed the first reduction in the availability of temporary workers since February 2020. While the pandemic has seen people going into freelance work following redundancy, the ISPE says recent changes to IR35 are clearly affecting confidence in the sector.

While early indications show that contract extensions are up, many contracts will have been reclassified as inside IR35. It will take time for the impact of the new rules to be known, particularly against the backdrop of economic uncertainty. However, it’s hoped that increasing demand for contingent workers and competitive rates will offset some of the negative fallout of the IR35 reform. It’s critical that the UK’s flexible workforce remains viable, otherwise the government could see a double fall out in lost tax revenue and growing skills gaps as contractors exit the sector and possibly leave to work overseas.

For more on the post-lockdown skills that will get you noticed, check out our article here. If you’re looking for a fast and efficient payroll solution, Contracting Scout can assist with the administration of your billing and invoicing requirements to ensure you are set up quickly and paid promptly. To talk to a member of our team, call:  0203 603 1878

 

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