This week we’ve turned to 250 of our clients, representing the UK’s most senior contractors and consultants, to gain an inside view of the EU referendum – and the results paint an interesting outlook. Follow us on #innieuref for the latest stats.
Our clients work across all sectors and businesses in the UK – from Amazon to the Yorkshire Building Society. The resounding message is that, for the most part, leaving the EU will harm their future, to the extent that 46% would be less likely to recommend the career choice, compared to the 93% who recommend it today. Only 26% would reconsider recommending contracting if the vote is remain.
Tentative times for contractors
It’s very telling (and not surprising) to witness the uncertainty contractors are experiencing day to day, with almost a quarter seeing a slow down or even cessation of projects until the outcome of the referendum is known. This slow down is especially prevalent in the banking sector where 37% of projects have slowed or been shelved. 59% of those working in finance say that this industry is more sensitive to Brexit than any other. Interestingly these same professionals are the ones most uncertain of what the future holds for them, with only 44% saying they understand how their lifestyle may change if Britain leaves the EU. Contrast this with 76% in the IT sector who are confident in understanding the impact.
Contractors are vital economic barometers
I’ve always held the views of contractors in high regard, and they’re a very good barometer of the economic outlook. Take for example the 2008 recession. Contractors felt the pinch long before the UK officially went into recession – growing uncertainty put large projects under the kibosh, which sapped demand for contractors. BUT conversely, as soon as there was a sniff of confidence in the UK economy, the contracting market boomed. Our research has shown that it took the UK contracting market just 12 months to recover after the recession. Contrast this to general employment: it took six times longer for unemployment to drop to pre-recession levels. This makes logical sense: contract resource is an agile way for major corporations to invest in infrastructure, and new products and services before economic stability is a certainty.
It’s also true that any change is good for contractors: change creates project work which is ideal contract fodder. Therefore, following a Brexit it’s likely that short-term contract demand will rise across most sectors that aren’t associated with growth (marketing consultants are going to have a tough time following a potential Brexit).
But the longer term position is more difficult to predict. If some of the economic predictions such as a fall in the value of sterling, a crash in stocks, or a withdrawal of overseas investment come to fruition, the longer-term prospects of contractors could be devastating. Only the very cream of the crop will survive as businesses invest in critical projects, if at all, rather then the ones that stimulate innovation and growth.
Looking back at the 2008 recession, contractors told us they were still optimistic things would change. This time the outlook is very different suggesting that Brexit is more of a threat to the profession than a recession. On a positive note, you would hope that the Treasury are so distracted with divorce proceeding that IR35 becomes lost in the wash.
Is brexit a threat to work/life balance?
When we spoke to our clients this week, we also asked about their motives for contracting. And whilst it’s true that many are drawn to the higher rates, 91% are drawn to contracting to improve their personal and professional lifestyles. 70% have improved their professional lives (more variety of satisfying work), and 58% have improved their personal lives – such as spending more time with families or taking part in sport.
And here lies the rub: whilst 9 out of 10 of contractors have better personal and professional lives, and 1 in 3 think this in under threat if the UK leaves the EU.
On a lighter note…
But amongst the uncertainty, doom and gloom, it’s great to hear that the UK’s brightest contractors aren’t loosing their sense of humour. “What referendum?” said one respondent when asked about the impact of leaving the EU. I do wonder if that’s what he said to UKGOV last night when asked to explain why his voter registration platform crashed.