PAYE umbrella contractors and other freelancers are increasingly being used by UK businesses, according to a new survey from online recruitment firm

Over the last twelve months, two thirds of the 9,000 businesses surveyed in the study reported that they were hiring contractors from umbrella companies as well as other freelancers to fill their skills gaps and ensure that projects could be completed. 80% of the firms polled were small businesses. When asked why they had chosen this hiring option, nearly three quarters (71%) said that the cost savings and flexibility delivered by freelancers had driven their decision.

Companies in the web design industry and IT sectors were most inclined to turn to freelancers, confident that specialists in IT contracting would be highly skilled and competent. Legal services, accounting and marketing firms also frequently used this method of employment.

The economy, yet again, is behind the increase in contractor hiring – employers remain wary about offering permanent contracts in conditions of continued economic turbulence and, in some instances, are implementing redundancies on a large scale. These very conditions have made contractors a more desirable option, with 70% of respondents claiming that they plan to continue using freelancers in the long term. Having felt forced to hire contractors due to the precarious economic climate, many employers have discovered that they actually constitute a cost-effective and easily accessible means of sourcing much-needed expertise.

The Head of Commercial Development at freelance trade association PCG, Iain McIlwee, said “Freelancers are often more results-driven, easier to acquire at short notice and can be used to bring in an outside perspective to a business.”

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