If the old aphorism that necessity is the mother of invention is right, the recession may have unleashed a tidal wave of innovation in HR Departments across the UK, as more and more of them turn to umbrella companies to supply temporary staff. That’s according to Gerry McLaughlin of the specialist online IT portal, ITContractor.com, who says that there has been a “dramatic change” in the status of temporary workers amongst HR professionals in the UK.

Increasingly, companies are coming to view contractors from umbrella companies or limited companies as “integral” to their ongoing business, rather than as a cost (as they had been prone to view them previously), Mr McLaughlin explained. Even the major financial institutions, he said, were holding on to temporary personnel and opting to shed costs elsewhere, which should come as good news to freelancers on contractor payroll.

Contractors working in the IT skills market especially may be spared some of the worst effects of the economic downturn as a result of this growing trend, a fact reflected in the level of contractor pay rates which are at their highest since 2008, Mr McLaughlin added.

His comments, however, coincide with a rather less optimistic outlook for IT contractors produced in the latest market report by CWJobs.co.uk. The number of advertised posts for IT freelancers grew by a mere 0.9 per cent in the final quarter of 2010, the report indicates, claiming that the weak growth “may indicate a slowdown in overall IT recruitment activity in the coming year.”

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