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2016: The Rise of Contracting

Date: 28 January 2016

Contracting is becoming an ever more attractive option for candidates as the working world continues to evolve, moving further away from the permanent job-for-life mentality of previous generations.

Research has shown that the number of contractor positions available to candidates is increasing dramatically, with 2016 set to be the ‘Year of the Contractor.’ Staffing Industry Analysts reported that the independent workforce in the US grew by 12% within the last five years, in the Europe this grew by 45% between 2003 and 2013.

"The contract workforce grew by 12% in the US within the last 5 years, and 45% in Europe within 2003 and 2013 - Staffing Industry Analysts" 

In the US in 2014, the ASA Staffing Employment and Sales Survey discovered that staffing firms hired 5.4% more contract workers on average on a weekly basis compared to 2013. In total, firms in the US hired 14.6 million contract employees in 2014, an increase of 32.7% since 2013 (ASA).

Similarly, data from the Recruitment and Employment Confederation (REC) has shown that the UK recruitment industry recorded a turnover of £31.5 billion in 2014/15; an increase of 9.7% that was largely fuelled by temporary, contract and interim placements. In 2014/15, REC also found that on any given day in the UK, 1.2 million people were employed in a temporary, contract or interim assignment. This is a 3.6% increase from 2013/14. Anecdotal evidence also suggests a growth in contract hiring within Asia.

This isn’t just representative of experienced candidates, however; more students are also seeking contractor positions during and immediately after their studies, helping to fuel growth in this sector further.

This is positive news for professionals seeking a contracting position or looking to continue contracting. By 2020, it is predicted that 40% of the US workforce will consist of independent workers (Intuit).

"By 2020, 40% of the US workforce will consist of independent workers" – Intuit 


Let’s take a look at the more specific trends that are helping to drive the contracting sector forward:

1. Millennials are abandoning the traditional career path

According to the US Bureau of Labor Statistics, six million millennials are actively seeking contractor positions as a movement against the traditional career paths trodden by their parents. As millennials represent 44% of the workforce, this mind-set is shifting overall working economics.

The desire for flexibility is a key reason behind this shift. 19% of millennials said flexibility was what they most actively sought in a job role and contracting definitely offers this benefit.

2. Businesses are changing to fit the worker, not the company

In the past businesses sought to prioritise company values rather than those of their employees – this is now changing as businesses realise that in order to attract the top talent available, they need to cater to changing candidate demands.

As talented professionals become less likely to commit to a single company, businesses are having to offer contractor positions in order to attract such candidates. This allows businesses to focus more on results. Hiring contractors allows for more focus on the management of specific projects leading to increased accountability and faster turnaround times – this is beneficial for a company and so more are willing to consider catering to contracting demands.

3. Smaller businesses are using contractors to support scale up

Given the more concentrated focus on the results that contractors provide, smaller businesses and start-ups will look to leverage such expertise to help implement rapid company growth. Contractors are able to highlight the best approach to help grow a business quickly without the company itself having to commit to a permanent employment contract, something start-ups are beginning to recognise.

The US Bureau of Labor Statistics has also revealed that hiring contractors can save a business money. The average employer cost is $29.71 per employee per hour, of which 30% of this cost is associated with employee benefits. As contractors are not eligible for such benefits, businesses save 30% with each contract hire.

4. Increased connectivity is helping to promote remote working opportunities

Contractors are no longer always required to work from a company’s office or work site. Improved connectivity services allow for individuals to work for businesses all over the world at a time and frequency to suit them. As permanent employees take advantage of remote working and flexible options, it stands to reason that contractors will do the same at an even more accelerated rate in industries that allow it.

As the needs of the worker are given precedence, remote working will also increase alongside flexibility. This empowers contractors to enjoy a flexible career path and will ultimately pay dividends for companies in increased productivity and real estate costs.

5. Contracting will become a long-term career path

As more professionals seek the benefits of contract work and businesses simultaneously expand their offerings to meet these demands, contracting will swiftly become a long-term career plan for many.

Contently, a content marketing platform provider, found in their “State of Freelancing” survey 2015 that over two thirds (67%) of respondents said they planned to freelance for the next decade. Over 600 freelancers were asked 25 questions regarding the freelance and contract industry - their responses suggested that less traditional working roles are no longer seen as merely a chance to improve skills and experience in the short term prior to securing a permanent position.


If you’re considering a career move into contract work or are seeking your next contract position, contact us today.

You might also be interested in Part 2: Why Consider Contracting?

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