The Rise of Temporary Staff in the UK Economy
The Rise of Temporary Staff in the UK Economy: A Flexible Workforce for a Changing World In today's fast-paced economy, businesses across the UK are increasingly turning to temporary staff to meet their evolving needs.
With fluctuating market demands, skill shortages, and the push for more agile working models, temporary staffing solutions offer the flexibility companies need to remain competitive. The numbers speak for themselves—temporary roles are on the rise across sectors like healthcare, retail, and IT. This shift provides businesses with a cost-effective way to scale up or down while gaining access to specialized talent on short notice.
For workers, temp roles often offer flexibility, variety, and opportunities to develop new skills or transition between industries. At the heart of this trend is the need for businesses to remain
adaptable. With temporary staff, companies can respond quickly to new challenges, ensure continuity, and drive growth—without long-term commitments. This dynamic workforce model is fast becoming the go-to strategy for UK businesses looking to stay ahead in a changing world.
In the UK, a significant number of companies use self-employed contractors. This practice is common across various industries, from tech and creative sectors to construction and healthcare. According to recent statistics:
Approximately 4.3 million self-employed individuals are active in the UK as of 2023, representing around 13% of the total workforce.
Many UK businesses use contractors, with estimates suggesting that over 30% of companies rely on them either regularly or intermittently.
While exact data on the number of businesses that specifically use contractors isn't always available, it's clear that a substantial proportion of UK companies engage freelancers or self-employed contractors, especially for specialist roles or project-based work. This trend has been rising with the gig economy and the flexibility it offers businesses.
In the UK engineering industry, the use of self-employed contractors is prevalent, particularly in sectors such as civil, mechanical, electrical, and aerospace engineering. Several factors contribute to this trend, making contractors a valuable resource for engineering firms.
Key Reasons for Using Contractors in Engineering:
Project-Based Work: Engineering often involves large-scale projects with fluctuating workloads. Companies prefer to hire contractors for specific projects, reducing long-term employment costs.
Specialized Skills: Many engineering projects require highly specialized knowledge or skills that aren’t needed full-time. Contractors with niche expertise are hired to meet these demands.
Flexibility: Contractors offer flexibility for companies to scale up or down depending on the project phases, particularly in industries like construction, infrastructure development, and energy.
Cost Efficiency: Contractors allow companies to save on benefits, pensions, and other employment-related expenses. In some cases, companies can pay a higher hourly rate but still save in the long run due to the temporary nature of the employment.
Engineering Sectors with High Contractor Use:
Construction and Civil Engineering: Contractors are widely used for infrastructure projects like bridges, highways, and urban development.
Oil & Gas and Energy: Given the cyclical nature of this industry, especially in the North Sea oil fields, self-employed contractors are common for onshore and offshore engineering projects.
Aerospace & Automotive: These industries rely on highly specialized contractors for design, testing, and manufacturing projects.
Telecommunications and IT Engineering: Contractors help with the rollout of 5G, fiber optics, and digital infrastructure, as the demand for tech-based engineering skills grows.
Contractor Statistics in the Engineering Industry:
Around 20% of the UK’s engineering workforce are believed to be self-employed contractors or freelancers, though this can vary by sector.
The construction industry alone, which includes a significant portion of civil engineering contractors, has around 37% of its workforce self-employed.
Engineering contractors are often paid higher daily or hourly rates due to their expertise, but their contracts are usually shorter in duration.
Contractor Roles in Engineering:
Some common contractor roles include:
Project Engineers and Design Engineers for infrastructure projects.
Specialist Mechanical/Electrical Engineers for manufacturing or production lines.
Field Engineers in oil, gas, and renewable energy projects.
Site Supervisors or Construction Engineers on building and civil works projects.
Impact of IR35 Regulations:
In recent years, changes in IR35 tax legislation (which governs how contractors are taxed) have impacted the use of self-employed contractors in the UK. Engineering firms have had to assess whether their contractors fall inside or outside IR35, leading to adjustments in how contracts are structured.
Would you like to know more about how IR35 impacts this or how contracting in engineering compares internationally? info@goldgroup.co.uk or call 01342 330516
At Gold Group, we make temporary staffing simple, effective, and fast, so your business can stay ahead.