With the AWR going live at the beginning of this month, the UK’s umbrella companies are unlikely to be adversely affected, as some commentators had feared, according to the Cranfield School of Management.
Dr Claire Kelliher, a professor of work and organisation at Cranfield, concedes that employers may have to “think a bit more carefully” about the way they use temporary workers from now on, but the demand for highly skilled – and highly flexible – PAYE umbrella contractors will not be diminished by the regulations.
Businesses are still going to need the flexibility contractors can deliver, Dr Kelliher explained. However, they will need to think carefully about their reasons for employing temps, she said, adding “Those that have big variations in the nature of demand in their business, whether on a very short-term basis or perhaps those that have seasonal peaks and troughs in their demand for labour throughout the year, [will find] they still have that flexibility in that they still have the option to employ these people – but it may cost them slightly more to do so.”
A major implication of Dr Kelliher’s view, though, is that, unlike relatively unskilled temporary workers, contractors working for umbrella companies bring with them a wealth of experience and expertise in their respective fields, and employers will not suddenly become blind to the benefits of hiring them. As highly skilled professionals who can be drafted in for specific projects when needed and then let go, with no added expenses such as occupational sick pay, holiday pay, and maternity pay schemes, contractors still represent exceptionally good value for money.