Brexit and the future of contracting

Brexit and the future of contracting

Three years down the line, everyone is still waiting to see what the effects of the decision to leave the EU will be. For now, there’s still a lot of uncertainty, leaving many contractors to speculate over the potential implications.

We recently asked our clients to share their views on Brexit and their plans for the future. The results were decidedly mixed. 41% are positive about the future for themselves and an additional 13% are confident Brexit will bring new opportunities to contractors. 23% are not as positive for the future as they were before the Brexit vote. While 13% say they are waiting to see how Brexit pans out and may consider going permanent this year.

What best sums up your outlook for the future?

For now, the job market appears to still be going strong and IT contractors especially have seen a surge in demand. This may not always be the case as we venture into the unknown. But looking back at the global recession of 2008, contracting demand dropped sharply in the three months before the UK entered recession. Companies started to hedge their bets and delay or cancel projects – they wanted to control costs ahead of uncertain times.

As we saw then, business decision makers will look for opportunities to maximise growth. If there’s enough confidence to invest, but not enough to take on permanent employees, this creates the perfect conditions for a buoyant contracting market. The contracting market has always been quick to rally in times of economic instability, but it’s best to err on the side of caution. Now’s the time to be focusing on growing your contacts and savings.

“Businesses have been distracted by Brexit, pausing projects and redeploying internal resources to risk management. There will be short term turbulence whilst Brexit risks are managed, but the positive outlook remains. People from around the world find us an attractive place to work and study and so will business. The fundamentals of who we are as a nation hasn’t changed. As the dust settles, business confidence increases and focus once more shifts to growth – the specialist skills provided by contractors will be needed.”

Matt Poyser, co-founder of inniAccounts

As a contractor in the UK, you may be wondering whether Brexit will have a positive or negative impact on your job, and how it will affect your pay; if so, you’re not the only one. Because the full implications of Brexit have yet to come to life, contractors in all sectors remain unsure of what awaits them. That’s why we’ve created an expertly-authored eBook to help you ensure you’re in the best possible position to thrive during and after Brexit. Download our free eBook here.

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Managing future changes

When we asked our clients to look ahead to their finances for the next year or two, the outlook was variable 50% of contractors believe they will see an increase in their rates or an increase in work and earn more. There is certainly a shortage of appropriately skilled, willing and able candidates in certain markets; such as the IT and legal fields. Roles that will play a crucial part for businesses as Brexit plans become finalised.

Certain roles will always be in high demand no matter the economic situation. However, 26% believe they will have to drop their rates or will see a slowdown in available contracts. This could be a key indicator that some industry skills are more susceptible to negative impacts from Brexit. Certainly contractors working predominantly in the public sector where many projects are being paused to focus resource onto Brexit may feel something of a dip. 10% of our participants feel Brexit will bring new opportunities and an increased work load while 15% can’t predict how their income will change what with the future plans for the UK still being murky.

How will your income change in the next 1-2 years?

These predictions may be linked to what contractors know, or rather don’t know, about their clients’ plans to manage Brexit. A whopping 60% can’t say how their client is currently planning for Brexit. Of course, contractors are there to get on with their set project and generally not to plan strategy or get involved with in-house politics (it’s one of the perks of the job). But this could be more indicative of what we’ve recently seen in the news, with many businesses unsure of how they’ll be approaching Brexit and still waiting for more certainty.

20% of our respondents reported a slowdown in their projects while 12% say their incoming work has ramped up – certainly many of our clients have reported a boost in projects focusing on Brexit risk management.

The State of the Nation 2019

2019 is set to be another year of monumental change and uncertainty. Politics, the economy, society and technology are all continuing to change at lightning speed. That’s why, in January, we conducted a survey to find out how contractors are preparing for the future. Our 2019 report brings together our thoughts on the current mood of contractors across the nation, leveraging data from our expert clients and comment from our in-house specialists, to provide a close-up look at what contractors are talking and worry about for the coming year.

Download the free full report in our eBook library.