Volatile economy works for us

Economic volatility has boosted hiring of freelancers, new research shows, with many organisations opting to hire temporary contractors rather than commit to making permanent appointments.

The Association of Professional Staffing Companies (Apsco), a recruitment industry trade body, said that the number of temporary contracts that its members filled for clients rose by 4 per cent during 2012. By contrast, permanent appointments fell by 2 per cent over the year.

Ann Swain, the chief executive of Apsco, said she expected that trend to continue during 2013. “Permanent hires can be a big financial commitment - aside from the immediate salary costs, employers will also need to think about pension payments and other factors such as liability for any possible redundancy payments,” she said.

“Rather than making permanent hires, many businesses may want to wait and see what 2013 will bring.”

The biggest rise in temporary contracts was registered by the media and marketing industry, where the number of such placements was up 8 per cent during 2012. Permanent hires in the sector fell 15 per cent last year.

IT also saw good growth for temporary contractors, with hiring up by 6 per cent over the course of the year.

“For 2013, we’re forecasting that demand from employers for both permanent and temporary roles will be a little stronger, especially once we get to the second half of the year,” said John Nurthen, of Staffing Industry Analysts.

“However, the recovery is still fragile so any uplift in employment could be deferred if the government’s economic expectations are not met.”

A sharp rise in the number of people in self-employment is seen by statisticians as one likely explanation for the fact that unemployment has fallen over the past 12 months despite the struggling economy.

By David Prosser