A new study has found a striking rise in the number of high-end contracting professionals specialising in a broad variety of occupations who are choosing to work via Umbrella Companies. Improved pay rates and the availability of longer-term assignments appear to have played a key role in driving the new march to the Umbrella model of engagement.
The study was conducted by Umbrella Company trade association the Freelancer and Contractor Services Association (FCSA), and it makes a comparison between Umbrella work in 2015 and in 2017.
The key findings are:
- The average pay rate for assignments has risen appreciably in the space of two years, with almost three-quarters (73 per cent) of the contractors surveyed now earning £15 per hour or more. In 2015, the proportion was just over a half (53 per cent).
- Assignment durations have, on average, doubled in the same space of time. In 2017, Umbrella Company Employees currently work an average of 29 weeks per assignment. The average duration was 14 weeks two years ago.
- Contracting professionals are opting to remain with the same Umbrella Company for longer periods of time. The average length of employment has soared by more than 50 per cent since 2015, climbing from 30 weeks two years ago to 46 weeks in 2017.
- The proportion of Umbrella Company Employees working in the Construction sector has fallen significantly, plunging from 21 per cent in 2015 to just seven per cent in 2017.
- By contrast, the proportion of Umbrella Company Employees working within Health and Social Care has surged from six per cent in 2015 to 17 per cent in 2017.
Commenting on the findings, FCSA CEO Julia Kermode noted that the study furnished strong evidence that the Umbrella marketplace has matured considerably over the last two years. Noting that Umbrella Company Employees are enjoying improved pay rates and longer assignments, she pointed to greater levels of loyalty to their chosen Umbrella Employer.
The evidence of the study, she went on, suggests that the market has developed in a few short years and offers stability to those who choose to work in it.
She added: “We were pleased to hear Matthew Taylor recognising the importance of Umbrella firms as a valuable part of the supply chain in his recent review of modern working practices. The Umbrella sector collects approximately £3bn for the Exchequer annually, and the review panel clearly appreciates the important contribution it makes to the UK economy. Our latest research, along with the support of Matthew Taylor, is to be much heralded in an industry which is often maligned and misunderstood. We have come a long way over the past few years.”