Why is contracting such a popular way of working?

There are 4.86 million self-employed people in the UK, meaning those who do not have continuous employment. This means that just over 15% of the entire workforce consists of contractors and freelancers. Ten years ago, this number would have been in the tens of thousands, and now contractors make up a significant proportion of workers and professionals in the UK.

So what is the reason for this shift in the workforce? Why is contracting so popular now? We look at some of the environmental and motivational factors that have contributed to the increase in contractor numbers:

1. Technology

The capabilities of technology have skyrocketed in the last 15, 10, and even five years. As the world moves faster than ever before with an ever-increasing reliance on technology, people expect more and better. This means fewer jobs in some industries and a professional requirement for technological proficiency.

Just as technology adapts and evolves, so do humans. IT and Tech are two industries that have some of the highest concentrations of contractors and freelancers, showcasing how people have risen to the challenge and recognised the opportunities available to them.

2. Work-life balance

Decades ago, the Monday to Friday, nine-to-five hours of the white-collar worker were considered the standard and the norm. People dutifully clocked in at 9 AM and clocked out at the end of the day and didn’t necessarily consider there was a better way.

Whilst a majority of workplaces are still behind the times, many businesses have come around to the 21^st century way of working, which includes flexible hours whereby staff can come in later or earlier, or even work from home. With globalisation, having flexible business hours and staff has become key.

Those who crave a work-life balance, as many now do, tend to gravitate towards roles that offer this option. Many of these professionals are now contractors, as some industries don’t offer flexible hours unless the worker is a consultant or a contractor who acts as their own boss.

3. Increase in agency and contract workers

Many industries now rely on agency and contract workers to fill temporary (or even long-term) skills gaps that exist on key projects or in operations. Others such as the healthcare industry have contingency staff on an ad-hoc basis to cover times of higher demand.

Factors contributing to the increase in part-time roles and contracts available include fluctuating business, economic uncertainty, increasing technology and changing working practices as mentioned above. Additionally, outsourcing talent allows many companies to offer better products and services at static pricing due to lower overall labour costs.

4. The gig economy

The gig economy has grown astronomically in the last several years, with specialist freelancer sites such as Upwork and PeoplePerHour – and even standard job sites like CV Library and Monster – being used by professionals searching for or offering their services for short-term projects.

Younger generations are catching on to the glitz and glamour of being a freelancer, and many are setting themselves up as self-employed straight out of universityor in their twenties. There are thousands of freelancers – particularly in the creative industries – who have seen the benefit of contracting and being their own boss.

Contracting comes with many benefits, including increased earnings potential, skill development, flexibility and choice, career autonomy and more. It’s no wonder that nearly five million people in the UK have become contractors, whether by choice or necessity.

If you would like to know more about what it’s like working for yourself, download our Ultimate Guide to Contracting where you can read more on the benefits of contracting and your accountancy options as a contractor.

If you have any questions, please leave us a comment below.