Almost a third of employers will be more likely to hire contractors this year after the upcoming changes to IR35 rules to offset any overpayments.
The survey, from recruitment company Robert Walters, shows that 29% of employers are encouraged by the offset rule, which comes into force in April.
Under the change, HMRC can offset any taxes already paid by an employer if an error has been made when determining the employment status of a contractor.
This would address any concerns over making overpayments to the government, meaning businesses can avoid the risk of ‘double taxation’.
Robert Walters’ analysis of job ads found that roles seeking skills in DevOps and project management had risen 33% year on year. Ads for contractors with skills in business analysis went up by a quarter.
Just over four in 10 employers surveyed by the firm said that sourcing skilled contractors was their main concern.
Forty-three per cent of employers said their main reason for hiring temporary talent was down to their experience in delivering projects.
Just over a quarter (26%) said contractors had a greater ability to offer adaptable skills and schedules because of their flexibility.
However, almost six in 10 contractors said they had not increased their day rates in the past year compared to permanent staff.
That said, contractors with hard-to-source skills such as machine learning, data science or the computing language Python did see an increase in demand.
Lucy Bisset, director of Robert Walters UK, said: “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.”
Although some were positive about the IR35 rule change, two in five said they were unsure how the new offset rule would impact their business. A quarter said issues with compliance were still a deterrent to hiring contractors.
Bisset added: “Issues with compliance and regulatory change do pose a clear deterrent to contractor hiring – and highlight the need for employers to get to grips with the legislation.”
She said employers were overcoming difficulties sourcing skills in a variety of ways, including clearer listing of required skills in job ads, offering competitive day rates, ensuring hiring processes take no more than two weeks, and adding a short skills assessment to the application process.
She added: “The current market conditions in the UK are forcing employers to adopt a more strategic approach to hiring – temporary talent could be pivotal in this.
“Despite inflation and interest rates predicted to drop towards the end of the year – the wisest course of action for employers to take is to address existing skills gaps and engaging specialised assistance on a project-to-project basis to help optimise their current offerings and services.”
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