For the last 28 years I have been recruiting technology contractors for clients across the UK. One of the most common objections to hiring that I have been faced with has been cost. “Ah Jeremy, we have used lots of contractors before, but they have been really expensive”. Perhaps that was true in the past, but is this still the case now?
Here are some considerations:-
Reducing Contractor Rates
- Contractor rate expectations more varied than ever
- Outside IR35 opportunity
- Working from home (more effectively)
- Reduced travel and need for overnight stays
- More mature market
- Increased competition
- Reduced hiring, management and finance costs by supplier
- Flexible ways of working other than traditional T&M
Increasing Employment Costs
- Salaries often linked to cost of living and inflation – significant increases
- Increase in Employers National Insurance
- Mandatory Employer pension contributions
- Apprenticeship Levy
- Increase in employers liability insurance costs
- Increase in Recruitment, HR and Payroll Cost
- Changes in employment law
- Reduced productivity
It is impossible to create a standard definitive list, let alone work out a % or £ cost of each of these variables, every client and scenario is unique. But, looking at some real life data, taking into account these factors, arguably that famous contractor cost objection is no longer true!