It’s no secret that UK PLC is at crisis point when it comes to skilled workers. Our key industries are on red alert with more than 200,000 unfilled skilled vacancies. We don’t have the expertise we need and there are now swathes of initiatives battling to reverse the decline in our skilled workforce. However, for contractors, freelancers, self-employed people and temporary workers this presents a major opportunity.
A new survey by the UK Commission for Employment and Skills (UKCES) has painted a bleak picture. The major survey, which polls more than 90,000 businesses in the UK has found almost 1 in 4 jobs is vacant due to a lack of skilled workers.
Even more worrying is that the Employer Skills Survey found the skills shortage has more than doubled in the last four years.
What this means is that many businesses are now in desperate need of freelance expertise to help deliver their ambitions. Step forward the UK’s army of 1.6 million contractors and self-employed people.
Skills gap is putting UK economy at risk
The UKCES Employer Skills Survey 2015 is a recognised barometer of UK industry and it shows 23 per cent of jobs now can’t be filled because of the UK skills shortage. This represents a 130% rise on the last survey in 2013 and means there are currently 209,000 vacancies without a suitable skilled candidate.
By having a huge gulf in the required skills, the survey shows that UK productivity is being severely impacted and it is threatening to stall the growth of the UK economy.
Key industries seeing the biggest skills shortage include financial and professional services, construction, transport, communications, digital technology and IT, manufacturing and utilities. The survey shows financial services and business services need 57,000 more skilled workers, transport and communications want 24,100 candidates, manufacturers are 15,000 short and construction firms also need another 15,000 workers.
Worse still is the huge rise in the number of jobs created. In some industries available roles have risen by as much as 8 per cent and that is increasing the problem we face.
Contractors can overcome the skills crisis
The new modern way of working for British industry is the answer to this problem. Employers are increasingly turning to contractors and freelancers to deliver the skills they need and that means there are a wealth of opportunities for self-employed people.
We can confidently predict that the contractor sector will continue to grow for at least the next five years. Their expertise, insights and experiences are in high demand and we will continue to see a growth in demand, largely in part to the growing skills crisis.
Contractors can fill the skills gap and help ensure the UK’s economy and productivity can continue to grow. Crucially, this creates a massive opportunity for self-employed people and for those considering a career as a contractor.
This sector must be nurtured by the Government as they can provide the skills businesses need on a short-term, freelance basis. Contractors will help our industries to flourish, ensure the skills we have are distributed evenly across key sectors and also generate wealth and future opportunities.
The average pay of contractors will rise as a result
The recent changes to taxation rules, including travel and subsistence claims and the continuing debate over IR35, have obviously raised concerns about the strength and growth of the contractor sector.
Many worry that contractors will turn their back on self-employment and seek permanent positions. I suspect we will see a number of contractors cutting back on the distances they are prepared to travel in the short term, but the market forces being exerted by the skills shortage will result in pay increases across a range of sectors.
These increases will soon offset any impact of the taxation changes and will continue to fuel the growth in the freelance sector.
Recent research has shown that the average salary for a contractor is £65,093 – almost £20,000 more than the average pay of permanent staff. This has obvious benefits but we are expecting to see contractor pay grow by an inflation-busting 7 per cent in some industries over the next year.
Once again, this will be fuelled by demand born out of the skills crisis and contractors must consider how their expertise can be applied to various industries and then work to improve their career prospects.
The UK skills shortage is obviously a serious concern and determined steps to reverse the trend should and are being taken. However, contractors, freelancers, temporary workers and self-employed people can provide the solution we need and help ensure the UK economy can continue to grow.