Crystal Umbrella

A dispute between the Royal Bank of Scotland (RBS) and Britain’s trade union, Unite, has highlighted the upsurge in contractor payroll in the UK. Whilst RBS has cut large numbers of permanent staff, an email leak over the bank holiday has revealed that around 3,000 freelancers are currently being used by the bank. However, Unite slammed the news, arguing that contractors should not be used in replacement of permanent members of staff.

The argument stems from a leaked email from Hays, the recruitment agency, reminding contractors to submit timesheets before the weekend of the latest bank holiday. Criticising the move to increase contractor payroll instead of having permanent employees, Unite’s national officer, David Fleming, said “It is wholly inappropriate that RBS, backed by taxpayers, appears to be throwing money at thousands of contractors.”

Freelancers association PGC however hit back at the criticism of RBS, expressing that it was a ‘knee jerk’ reaction. The Deputy Chairman of the group, James Collings, explained “RBS, in common with many organisations throughout the UK, see the merit in using a skilled and flexible freelance work force when and where there is a demand for their talent and paying these businesses a market rate.” He added that, with one in 20 now working as a freelancer, the contractors’ community was on the rise and had every right to be employed by corporate companies such as RBS. Whilst Mr Collings expressed concern at the leaked Hays data, he made it clear that contracting in the UK is becoming more prevalent than ever.

Contractors working through umbrella companies may be interested in recent research charting the effects of the recession on the freelance jobs market.  Recent studies by PeoplePerHour.com, Europe’s largest online jobs marketplace, and leading HR group, the Chartered Institute for Personnel and Development (CIPD) both suggest that as permanent posts disappear, freelance opportunities are rising.

PeoplePerHour.com’s study confirms the earlier findings from the CIPD research – work that had previously been kept in-house, especially in the public sector, is increasingly being outsourced to contractors.  More than 120,000 freelancers regularly scour the 70,000 plus jobs advertised on the PeoplePerHour.com website.  And, PAYE umbrella contractors take note, a fair proportion of those jobs were once available only as salaried posts in the public sector.

During 2010, the body count of salaried jobs axed from the public sector in the wake of government spending cuts reached a staggering 132,000.  But data from PeoplePerHour.com suggests that, for example, digital projects once kept in-house in public sector organisations are now being outsourced as never before: the number of digital job postings appearing on the site leapt by a breathtaking 315 per cent over the last year.

The switch to increased use of freelancers by public sector organisations is a relatively recent trend, at least when compared to the private sector, which turned to contractors swiftly when the recession started to kick in, cannily saving the additional costs associated with hiring permanent employees.

However, a worry about these trends is that saturation point may not be too far off – without truly substantial economic growth, and more public sector cuts on the way, the freelance jobs market could well start feeling a little overcrowded.

Umbrella companies supplying the IT skills market may well have noticed a “huge rise” in demand for contractors with digital skills over the last twelve months, according to a new study.

Recently published research from the freelancer’s marketplace PeoplePerHour.com reveals that while the Government’s public spending austerities have caused a surge in unemployment, the resulting shortage of manpower in the public sector has been offset by a flurry of contractor hiring.

In particular, contractors with digital skills such as search engine optimisation, database development and web design have been very much in demand. PeoplePerHour.com recorded a massive 315 per cent rise in postings for contractors with these skills over the last year.

Xenios Thrasyvoulou, the website’s founder, said that the private sector responded rapidly to the recession by shedding permanent staff and turning to freelancers instead. Thousands of businesses in the UK, he added, quickly understood that the best way to survive the new economic realty was to engage freelancers on time-limited contracts. The decision helped them to “stay lean and remain solvent,” he said.

The public sector, it seems, has taken a leaf from the private sector’s survival book. PeoplePerHour.com’s findings lend support to the PCG’s recent endeavours to encourage refugees from the public sector to consider freelance contracting as an alternative. Contrary to popular belief, the organisation cites evidence that many “ex-bureaucrats” can successfully make the transition from the public sector to the private through contracting. The key obstacle identified by recruiters, the PCG insist, is poor self-belief on the part of ex-public sector employees.

PAYE umbrella contractors working in the IT skills market may experience another surge in demand for their services if advice from a leading managed services company is heeded. Advanced 365 has recently urged entrepreneurs running smaller enterprises to embrace cloud computing technology, after a recent survey from PeoplePerHour.com suggested that many SMEs are sceptical about the potential benefits to their business of adopting the model. Almost three quarters of SMEs polled (74 per cent) in PeoplePerHour.com’s study revealed that they do not presently use cloud computing, with 43 per cent admitting that they’re unsure about what, exactly, it is.

Advanced 365’s Managing Director, Neil Cross, said that the figures were “hardly surprising” – cloud computing technology is evolving exceptionally rapidly and the number of options available is proliferating continually, making it a struggle for SMEs to keep up with, let alone understand. He also noted a failure on the part of some value added resellers and IT service providers to promote the commercial benefits of cloud computing, mainly due to their own lack of understanding. This is exacerbating the problem, he believes.

Mr Cross claimed that SMEs are unable to make informed decisions about cloud computing for their business if the advice they are receiving from existing suppliers is unclear. He urged small firms who believe this might be the case to consult a specialist cloud partner for advice. By choosing cloud technologies tailor-made to their specific business needs, Mr Cross added, small companies can reduce costs and improve operational efficiencies substantially, as the cloud typically minimises the cost of in-house IT-management.

If permanent IT posts fall in companies turning to the cloud, there may well be an increase in the use of temporary IT specialists working for umbrella companies who have expertise in cloud technology.

As depressing unemployment figures from the Office for National Statistics hit the headlines, many PAYE umbrella contractors may be feeling disheartened for 2011. However, the latest “JobsOutlook” from the Recruitment and Employment Confederation (REC) offers a more hopeful prospect for freelancers in umbrella companies, revealing that 86 per cent of private sector employers are planning to maintain or expand staff on agency payroll.

Unemployment rose by 44,000 during the last quarter of 2010 to hit 2.5 million, a figure which includes 965,000 young people aged 16-24. Altogether, 7.9 per cent of the adult population in the UK is currently jobless.

However, despite these dispiriting trends, optimism amongst private sector employers appears to have remained strong, according to the latest REC survey. 94 per cent of those polled said they were planning to increase or maintain at current levels their permanent staffing complement in 2011, and 35 per cent plan to expand their temporary workforce. Considering that only 22 per cent planned to do so last year, this represents a significant growth in confidence.

The REC’s Director of Research, Roger Tweedy, said that even though there is still concern over the UK economy, it is a “very positive sign” that so many private sector employers continue to turn to temporary staff, which include PAYE umbrella contractors, to deliver the flexibility they are seeking. He again expressed concern over the sheer scale of public sector cuts, which are yet to be fully felt. However, he also believes that in the long-term, “demand in the economy will lead to more private sector businesses employing more people,” which should largely make-up for the “public sector fall-out.”

Whilst contractors working for umbrella companies will have had their tax automatically calculated and paid, those who file self assessment returns should be on the lookout for a new e-mail scam, according to a warning issued recently by HMRC.

There has been an increase in the use of phoney emails disguised as official HMRC communications in recent weeks, this time advising people that they are entitled to a tax rebate.  But the first thing to note is that the real HMRC would never use email to inform taxpayers of matters such as this.

The fake emails contain a range of ruses aimed at getting people to divulge sensitive personal information.  One invites individuals to visit a webpage to verify their banking details; another claims that lottery winnings, seized goods or inheritance money will be paid as soon as the necessary personal banking data is supplied. Yet another invites people to download an attachment which ostensibly requests a refund through PayPal. In addition, HMRC warns, several such scams have emerged via SMS – recipients of these messages are asked to call a number in order to “claim” their “refunds.”

All are phishing exercises and should be avoided at all costs. If anyone receives such a message, HMRC requests that they forward it immediately to phishing@hmrc.gov.uk and then delete it without delay.

The timing isn’t accidental – the self assessment system inevitably results in many freelancers completing their returns at the eleventh hour (or later). Scammers tend to exploit flurries in activity to provide a convenient cloak for their nefarious deeds. Unsuspecting freelancers may be expecting all manner of communications and reminders from HMRC at this time of year, rendering fake tax-related emails more plausible.

HMRC will never contact you via email to request personal information or update you on personal tax matters.

The ranks of the UK’s umbrella companies could be swelled following the publication of a new report from the Institution of Occupational health and Safety (IOSH). It reveals that almost a third of the UK’s workforce claims to have experienced problems in personal relationships as a direct result of pressures at work.

29 per cent of the people polled in the survey said that their relationships had suffered due to a destructively skewed work-life balance involving excessive workloads and long hours. These were the two factors cited most frequently by respondents as exerting a harmful effect on their personal lives.

Commenting on the report, the Executive Director of Policy at the IOSH, Dr Luise Vassie, said that the struggle to attain a good work-life balance “is an ever growing issue in today’s society.” Too many people, she went on, are allowing work to dominate their lives, with the predictable consequence that home life suffers.

More people today are working harder than ever, a development which suggests that, far from freeing up greater leisure time, the long-reach, ultra-cast technology of the information age is simply increasing both the pace and duration of the working day. Relationships outside work are inevitably becoming strained as a result, a development which suggests that the old aphorism “I don’t live in order to work, I work in order to live,” has started to go into reverse.

People who have made the transition from permanent salaried employment to PAYE umbrella contracting often discover that they gain far greater flexibility over the number of hours they choose to work; it could well be that their numbers are about to surge.

The jobbing PAYE Umbrella freelancer on contractor payroll may be intrigued by new advice on enhancing CVs from the Professional Contractors Group (PCG). Not to put too fine a point on it, the PCG is advocating a radical change in the way that contractors have customarily composed their CVs.

The emphasis of the new approach is on boosting marketability, and the PCG website contains a range of innovative suggestions to achieve just that. The traditional method of listing career placements in reverse chronological order is one of the first things to be sent to the waste bin. Instead, the PCG advocates a “Case Study Portfolio Framework.” This entails writing each contract as an “evidence-based case study” of no more than 6 lines, and then placing them within a clearly titled section – the Contract Portfolio. According to the PCG, this approach “is the most effective framework for professional contractors to write their CV.”

The versatility of this approach is its most valuable characteristic – contractors applying for placements are able to change the order of the “case studies” in their portfolio around, depending on the particular role being sought at any one time. Naturally, employers will still want to see the dates of employment, but the PCG suggests adding a “Career Chronology” after the case studies – that way, applicants can provide a clear, at-a-glance summary of dates, company names and job titles.

The approach is designed to make CVs livelier and more relevant without compromising on factual data and professional style. The PCG includes other tips for improving contractor marketability on its website, including the use of social media, and will be holding a seminar in Central London on 28th February to share ideas on maximising social media accounts such as LinkedIn.

Further promising news has recently emerged for professionals working through umbrella companies in the IT skills market. According to Nathan Marke, who is Chief Technology Officer at the IT service provider, 2e2, more businesses are turning to cloud computing to increase flexibility and reduce costs, a move which should generate extra demand for IT contracting.

Mr Marke was speaking after the publication of a new International Data Corporation (ICD) report which reveals a growing trend in the direction of cloud computing. According to the report, the market in global cloud systems management software will have reached a massive £1.55 billion ($2.5 billion) by 2015.

Cloud computing technology offers businesses much greater flexibility, Mr Marke said, providing the potential to deliver growth at a reduced cost. In general, he went on, cost pressures have grown inexorably whilst IT departments struggle in the background to improve business agility and manage the “peaks and troughs in demand for applications and services.”

By contrast, cloud computing models allow businesses to achieve considerably more flexibility in their cost and skills base, Mr Marke continued. But they will also simultaneously deliver the optimal scalability for growth “at less cost and with greater flexibility than traditional IT models.” More and more organisations are realising this potential, he added, sharing his belief that cloud computing will become a “top technology priority” for businesses in the coming twelve months.

The IDC report also revealed that, increasingly, IT customers are expected to manage a blend of non-cloud, cloud and private cloud IT resources. IT contractors, it would seem, are set for a busy – and lucrative – future.

Contractors working through umbrella companies and limited companies might wish to take up some advice contained in a new report from OfficeCavalry.com: start using social media to enhance your success.

The report presents figures which show that a massive 71 per cent of UK businesses are now working to improve their online presence through social networking sites such as Facebook, Twitter and LinkedIn. A quarter of those polled reported that they considered the use of online social networking as a business priority.

Contractors in the IT skills market might especially capitalise on this growing trend – there is likely to be a boom in the demand for social media skills at the very least. Thousands of short-term vacancies in this area are forecast in the report for 2011.

Fifteen per cent of the firms surveyed said that they planned to create specific new roles to manage the boom in networking. For the jobbing PAYE umbrella contractor, however, there’s even better news – a hefty 65 per cent of the businesses polled will consider hiring contractors and freelancers for these roles in order to achieve a more agile, flexible and scalable solution.

Commenting on the survey, OfficeCavalry.com’s founder, Andy Turner, said that organisations are changing the way they do business thanks to the rise of online reputation management and social media. As the social media landscape is ceaselessly changing, however, companies will be seeking to invest in more cost-effective, scalable and responsive approaches to managing the new media. Enter the social media savvy contractor.