Popular Contracting Trends for 2021

Short-term workforces have seen a variety of changes since the Covid-19 pandemic began, and the year ahead will offer plenty more challenges – and opportunities. Generate’s payroll and contractor management specialists reveal the most impactful trends that contract professionals can track and take advantage of in 2021.

The Top Contracting Trends for 2021

1. Contracting is Here to Stay

With the additional admin burden and reduced tax advantages about to be driven through by new off-payroll legislation changes, some recruitment and employment specialists have speculated about the future of contract work. Temporary workforces have been further challenged in the past year by the introduction of new laws following Brexit, and Covid-19 has significantly disadvantaged contract workforces: 82% supply teachers were furloughed or unemployed in 2020, and 60,000 contractors either saw their take-home pay reduced due to furlough calculation errors or lost assignments altogether.

However, whilst some freelancers and interim managers have used IR35 as a catalyst to look for permanent employment, the vast majority of contractors have no intention of changing their employment status. Recent research reports that 70% of freelancers and contractors intend to keep contracting in the next three years. With students requiring several months’ catch-up teaching in classes across the country, and industries such as manufacturing, technology and retail growing rapidly as Covid restrictions ease, this confidence is well placed. A majority of temporary workers – 62% – are so confident in the prosperity of contract careers that they would actively recommend their situation and vocation preferences to other people.

2. Shift in Types of Temporary Roles Available

The rapid shifts in social, political and legal environments around the world have already begun to shift the market in terms of desired specialist skill sets:

Teaching – Despite the longstanding national skills shortage, some areas of education will see much greater demand for staff than others in 2021. The year ahead will see falling demand for international teachers as schools focus on recruiting local teaching staff, who are much faster to place without visa and work permit requirements, alongside a dent in the growth of international schools due to travel and relocation restrictions. The financial constraints of Covid-19 on parents, desire to keep children in the home for longer following the pandemic, and health risks to vulnerable family members are set to reduce the demand for Early Years teachers, whilst Primary and Secondary schools will be in need of all the supply teachers they can get.
IT – Whilst the year’s most in-demand roles will include Software Engineers, UX Designers, Front End and Back End Developers and Data Scientists, the largest shift will be felt in the Cyber Security area. Large global organisations such as Nationwide, Fujitsu, Coca-Cola, Schroders, BP, Ford and Deloitte have already committed to closing office buildings and enabling remote and hybrid working as the ‘New Normal’. The shift will leave thousands of companies requiring significantly ramped-up systems and processes to protect their businesses and millions of staff. The rate of growth for jobs in information security is projected at 37% up to 2022, which is much faster than the average for all other occupations.
Health & Social Care – Agency nursing is set to rise in popularity and demand, as hospitals and care homes address the backlog for essential care and services created by Covid-19. The pandemic has also exacerbated existing skills shortages, with one in three nurses considering leaving the profession altogether. Nursing Assistants, and in particular Primary Care Assistants and care workers who can provide care inside the homes of elderly and disabled patients, will be in high demand in 2021.

3. Remote Work Options

The work/life balance and reduced commutes enjoyed by many in 2020 will continue into the coming decade. Nearly three in four employees (72%) now expect to work remotely for at least half of their working week, and a miniscule number of individuals want to go back to the office full-time. The tech industry in particular has already responded to the interests of the candidate market. Since March 2020, the number of remote technology jobs posted has risen by 149%.

The most in-demand remote jobs in the coming year will revolve around technology and project management, for which IT contractors and operations specialists are ideally positioned. IT-related roles are also the most easily adaptable to working from home. Tested for over a year, employers’ trust in remote workers – even those whom they have not met in person – has grown beyond expectations. As companies across the world place more value in output and quality of delivery rather than hours in the office, contractors will increasingly benefit from remote work opportunities, globally diverse teams with colleagues based around the world, and more creative freedom.

4. Partnering a Payroll Provider to Ensure Compliance

Whilst all temporary workers and their end clients will have been aware of IR35 for some time, many companies and individuals remain uncertain or unprepared for the legislation changes. Although companies employing the services of contract and freelance workers are now responsible for determining off-payroll status, rather than the individual themselves, contractors will still shoulder significant risk. With the Government’s official Check Employment Status for Tax tool proven to miscalculate one in every seven cases, and the majority of employers lacking the intricate legal knowledge necessary to fully understand pages of professional jargon, contractors are in need of support – and many are turning to compliant payroll providers.

A fully compliant payroll provider will have extensive experience in navigating the IR35 changes deployed to the public sector in recent years. Payroll specialists will be able to utilise their deep and broad knowledge on tax legislation to ensure contractors receive the right status determination, explain the new responsibilities of contractors and companies regarding the law, and ensure contract workers are legally protected on every assignment.

Discover the real facts behind the myths of IR35.