The covid-19 crisis, the lockdown and the economic freefall it caused has undoubtedly hit companies’ hiring budgets. It’s hit companies’ everything budgets, and many are doing everything they can just to survive, including taking advantage of the Coronavirus Job Retention Scheme, otherwise known as furlough. Data shows a downturn in the number of jobs available, and that means digital and technology jobs too.
Of course, different sectors have had different reactions, and digital and technology recruitment has in some respects been sheltered from the downturn, as companies are forced to pivot many of their services to online-only – and that’s not even taking into account all the new technology considerations that go alongside remote working.
The contract recruitment boom
But coronavirus has changed one thing about technology and digital recruitment – it’s caused a very sharp and swift pivot towards contract work. Contract recruitment was always an important consideration in the technology sector – evidenced in large part by the outcry over the changes to the IR35 rules, which affected the way companies had to arrange tax matters when it came to hiring contract workers.
Coronavirus has pushed contract work even further to the fore, though. For a start, it led to the UK government postponing its planned changes to IR35, which led to experts suggesting employers and workers had immediately returned to contract recruitment as their preferred way of working.
Those experts said employees and employers would just figure out how to move away from contract recruitment in April 2021, when the IR35 changes actually take place. What this suggests is that contract work is simply a strategy that works for finding tech and digital talent, especially in a crisis.
Research by recruitment software company Broadbean Technology found that UK job vacancies dropped by 11% week-on-week during the last week of May. But Broadbean also discovered an “increased interest” in temporary and contract roles, with the number of applications per vacancy rising 34% for temporary roles, and 25% for contract positions.
Broadbean said that this trend suggests ongoing uncertainty has affected the job market – and the data demonstrates that the shift has been towards contract work. Alex Fourlis, managing director at Broadbean Technology said of the research: “The most interesting revelation in my view, is the uptick in applications for contract and temporary roles in comparison to those applying for permanent positions.”
One example of where this is playing out is in the banking sector. Research by recruitment company Robert Walters saw a particular uptick in contract work in banks, which were forced – like so many other businesses – to shut down or severely reduce their bricks and mortar operations and push customers towards digital services.
Ben Litvinoff, a business director at Robert Walters said: “Traditional banks have come under criticism for their service offering during the covid-19 outbreak, with calls for the financial services industry to work more closely with fintech counterparts to better utilise data and improve customer service.”
“In turn, banks and financial services firms have woken up to this and have been growing their tech teams at a much faster pace than their fintech challengers,” Litvinoff said.
A combination of uncertainty in the job market, then, combined with the need for more digital services, appears to be creating a contract recruitment boom. As a hiring manager or company executive, it’s worth considering whether this should be part of your hiring strategy as you look to deal with the covid-19 crisis in an agile and efficient way.