PAYE umbrella contractors in a range of industries are likely to find themselves in increased demand as employers downgrade permanent recruitment in favour of flexible staffing, the latest JobsOutlook survey from the Recruitment and Employment Confederation (REC) suggests.

The proportion of employers with short-term plans to increase permanent recruitment has fallen from 74% in July to 67% this month. Those with longer-term intentions to hire permanent staff in the coming year have tumbled from 66% last month to just 49% in August.

Contractors working through umbrella companies will be intrigued by another finding in the report.  Long-term demand for temporary staff has risen, with 83% of employers now planning to increase or maintain their use of workers on agency payroll over the next year. In the short-term, a substantial 79% plan to increase or maintain their agency staff levels.

The REC estimates that the number of temporary workers has risen to an all-time high of 1.6 million in the UK, enabling employers to have greater recourse to flexible options during the current fragile economic conditions.

The REC’s Director of Research, Roger Tweedy, said that economic stagnation was leading to greater caution amongst employers, who were turning to flexible staff, such as contractors, as a result. He added “This is a timely reminder of how a flexible workforce helps employers meet peaks and troughs in demand for services and products during uncertain times.”

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