A new study from accountancy company Nixon Williams has found that Umbrella Company Employees and other contracting professionals specialising in IT are benefiting significantly from higher pay rates and longer contracts following the Brexit vote.
The UK electorate’s decision to exit the EU may have sent shockwaves through the economy, but IT contractors are emerging as beneficiaries of the hiring uncertainties that climbed among many employers in the aftermath of the vote.
The polling of 600 IT contractors by Nixon Williams indicates that businesses’ caution about long-term hiring is not diminishing the demand for skilled contracting professionals, who are not only seeing their pay rates climb but are finding themselves working on longer projects too.
It seems that employers view contractors as a less risky option than permanent hires in a context of uncertainty over business prospects when the UK withdraws from EU membership.
In total, 20.5 per cent of respondents to Nixon Williams’ poll reported an increase in daily rates, up from the 19.5 per cent recorded immediately prior to last year’s June referendum.
Commenting on the findings, Nixon Williams CEO Derek Kelly said that existing Brexit uncertainties are likely to prove less damaging to contracting professionals than to permanent staff.
He went on: “Employers are likely to be reluctant to commit to permanent hires, and any business transformation projects related to Brexit will be of limited duration and will require highly specialised skills, making them ideal for contractors.”
Exploring the most in-demand IT skills, the poll found that cybersecurity know-how is at the top of the demand league table. Noting the acute shortage of these skills in the UK, Mr Kelly forecasts that IT contractors with the requisite knowledge will see multiple contracts and bidding wars before them shortly. He said: “As ever, IT professionals with the right skills will find themselves in demand and able to negotiate rate increases.”
The proportion of IT contractors who feel negatively about the UK withdrawing from the EU has also decreased substantially. Just after the referendum, 37.8 per cent of respondents expressed this view. Currently, just over 30 per cent do.
Of particular importance is the finding that most IT freelancers have actively chosen contracting as opposed to feeling pushed into it because they were struggling to find permanent roles.
A darker cloud on the horizon, however, is the likely impact of forthcoming IR35 reforms aimed at countering tax avoidance. Last week, research by contractor tax advisory consultancy Qdos Contractor revealed that 85 per cent of IT contractors are ready to embark on a mass exodus from the public sector if the reforms force them to pay the same income tax and NICs as salaried employees.