After months of speculation, we are officially facing a recession. But while the media would have us believe that there is nothing but doom and gloom ahead, a recession doesn’t have to mean a business slump.
In fact, some studies suggest that it is possible for businesses to thrive or even grow during the recession as long as companies approach it in the right way. In this article, we look at the key to unlocking growth despite an unstable economy, having access to the right people.
With companies looking for ways to cut costs, hiring freezes and termination of employment is common during a recession. But the current outlook is that this recession might buck the trend, as reports suggest that hiring intentions continue to grow in several sectors, including transport, storage, and healthcare.
Despite this, we also remain in a labour shortage, with demand for quality talent far outstripping supply. This makes it difficult for employers to follow through on their plans for growth.
But working with reliable contractors can plug those skills gaps and provide access to the kind of flexibility that is unheard of with permanent staff. In addition, working with contractors removes the risks and costs associated with permanent recruitment, fast tracking people power to exactly where it’s needed.
Having adaptable solutions to staffing needs during the recession is what will make the difference. And with experts reporting that this will be a short recession of up to two years, utilising contractors will provide businesses with the staff they need to thrive during this time.
And savvy employers are clearly already seeing the benefits by increasing their use of contractors, as the contingent workforce continues to grow. Recent research suggests that the number of temporary roles is currently at around 22% and will rise to 29% by 2030.
With the cost-of-living spiralling, finding ways to maximise income is crucial. Contractor wages are often higher than the same role as an employee, so many people are turning to contracting to increase their income.
But moving between multiple employers can feel unstable, as well as having a negative impact on the ability to access credit. Operating under a compliant umbrella company provides stability of employment, and offers a straightforward transition between roles, as needed.
Working with a compliant umbrella company also ensures that income tax and NICs are properly paid, as well as statutory sick and holiday pay. Some umbrellas also provide access to additional worker benefits.
Sadly, the umbrella industry is unregulated, which means that it can provide opportunities for unscrupulous exploitation. In 2022, there have been growing media reports of tax avoidance scams, as well as unpaid holiday pay scandals relating to umbrella companies. The most recent allegations about umbrella company skimming, which involves charging additional unexplained costs and reducing contractors pay week on week, are just the latest problems to hit the industry.
Thankfully, there are many compliant umbrella companies and pressure on the government to regulate the industry continues to grow. Initiatives such as Contractor Voice, the independent worker advocacy site, are raising further awareness of the issues.
But finding the right company is key. Working with a compliant umbrella is a very safe and beneficial experience for both contractors and hirers, providing access to quality contingent workers where needed, and a stable employer with the right employment benefits to contractors.
JMK Group UK is a compliant umbrella company, and we pride ourselves on our transparency, flexibility, and expertise, trusted by thousands of clients and contractors all over the UK.
We are here to support our contractors and clients through the recession and offer several tools to help.
If you would like further information on any of the above tools or would like to know more about how the recession might affect you, please get in touch.
Since 2002, JMK have been compliantly consolidating back-office, accountancy and payroll functions.
We have evolved to provide a range of expert services; such as Funding, becoming a leading provider to the contracting industry.
We know every agency is different in some shape or form, even if only by a little, but important bit. Combining our knowledge and experience of multiple sectors enables JMK to support you all from recruiters and payroll, through to finance, compliance and management.
With JMK as your trusted partner, even the smallest team can process the largest payroll, regardless of payroll type.
Have a look at the wide range of services our Funding can provide to you and your business, it is far more than just payroll and finance.