The latest Labour Market Outlook from the Chartered Institute of Personnel and Development reveals that a big majority of UK employers are turning to the services of PAYE umbrella contractors and other temporary freelancers.

74% of private businesses are hiring temporary staff, including skilled contractors working through umbrella companies, to help them meet key business targets and complete projects. The total rises to 78% after the inclusion of public sector hirers.

There are differences in the extent to which employers recruit temporary personnel, however, with manufacturing and production firms being most likely to do so (86% of those surveyed reported they had recruited temps) and the services sector least likely to (72%). 85% of public sector organisations hired temps, including contractors, in the last quarter.

The Agency Workers Regulations appear to be having an effect on the length of temporary assignments, with a fifth of employers hiring staff for less than twelve weeks (ie beneath the AWR threshold for equal treatment with permanent employees). More typically, however, temporary assignments run longer: 31% last for 12-26 weeks and 27% last for 27-52 weeks.

It may be that the very workers the AWR was designed to protect – low-paid, low-skilled workers – are being most affected by the ‘under 12 weeks’ pattern, while skilled, well-paid contractors are securing longer assignments. The report notes that, although the majority of employers plan to increase staffing during Q3 in the face of news that the UK economy shrank further, the motivation is more connected to the desire to retain key skills than to any appreciable rise in confidence.

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