Freelancers working for umbrella companies may draw some comfort from the findings of new research conducted by Peopleperhour.com. According to the report, more than 80 per cent of businesses in the private sector stopped appointing new permanent employees during the recession, turning instead to short term freelance contractors.

The study also examined public service hiring practises, and used the Freedom of Information Act to obtain the data it needed. In sharp contrast to the private sector, 38 per cent of local authorities actually increased the number of permanent staff hired over the last 24 months. The number of freelance contractors in the public sector also rose, however, with a third of local authorities increasing the level of short–term staff over the same period.

Xenios Thrasyvoulou, Peopleperhour.com’s chief executive, believes there are important lessons to be learned by public sector managers. Councils would do well to take a look at how the private sector responded to the recession, rather than clinging to what he called “outdated ways of recruiting.” With enormous pressure being placed on councils as never before to deliver services efficiently for the tax paying public, it may be that they will urgently need to consider expanding the contractor payroll.

The Peopleperhour.com study has arrived at a particularly apposite moment for the contracting community, following hot on the heels of the Professional Contractor Group’s National Freelancer Day, which was held yesterday. It seems that freelancers are attracting positive government attention at last, with no less a figure than Prime Minister David Cameron becoming the latest leading politician to declare his backing for this often under-acknowledged workforce.

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