Umbrella companies are increasingly in demand as more business managers opt for payroll outsourcing as a key means of keeping costs down, according to the PCG.

In the aftermath of the recession, while most sectors are struggling to keep going, freelancing is thriving, the organisation claims. The PCG’s research suggests that the consultancy market is flourishing with both the demand for and supply of contractors soaring. Companies are now driving costs down wherever they can, and many managers are turning to agency payroll solutions as “an ideal method of achieving this goal,” the PCG asserts.

Bosses see PAYE umbrella professionals offering the same expertise as permanent employees – but with none of the long-term financial commitments that permanent contracts involve. The PCG (formerly known as the Professional Contractors Group) continues:

“Senior officials recognise the fact that they can’t allow the standard of their output to slip – as this would result in the loss of customers – but they need to achieve this while spending less money than before, meaning freelancers are now often seen as the perfect solution.”

“Meanwhile, an increasing number of professionals seemingly feel that now is the perfect time for them to ditch their traditional office-based roles in favour of becoming a consultant as many firms are continuing to impose redundancies and wage cuts.”

The PCG’s claims are supported by new research from the technology analysis company Ovum, which reveals that IT contracting is a growing trend in the IT sector. Cash-strapped businesses in the utilities industry in both North America and Europe will, the research suggests, award significantly more contracts to consultants in the coming year because they regard hiring freelancers as the most cost-effective option.

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