Regulation impacts the contractor market

The contractor hiring market endured a tough year in 2017, according to findings from professional services recruiter, Morgan McKinley.

The firm has revealed in its 2018 UK Salary Guide that the contractor hiring market endured a tough year in 2017, with slow progress for temporary employment and contractors turning to permanent jobs in the accountancy and finance sectors. This was due to unpredictability in when and where vacancies would become available and an uncertain market caused by Brexit and a slowing economy.

Victoria Walmsley, operations director at Morgan McKinley, commented: “Overall, 2017 has seen a change in hiring trends across the temporary and contract market. The changes to the intermediaries legislation, otherwise known as IR35 or off-payroll rules, were a game-changer for contractors within the public sector.

“There has certainly been an appetite within Financial Services to recruit more permanent heads and we have seen a noticeable increase in the number of contractors converted to permanent, our highest number in 3 years. This sentiment is supported by the overall results for the UK employment market; the Office for National Statistics reports that the UK employment rate was 75.3% in 2017, which is the joint highest since comparable records began in 1971.”

However, there was a sharp rise in demand and increase of rates for regulation roles due to MiFID II, IFRS 9 and GDPR in Accounting & Finance Banking, Compliance, Financial Services Operations and Risk Management. Whilst rates for many contractors remained stagnant, the competition for regulatory individuals was fierce, and higher rates were demanded as a result.

The reports provide a review of the contractor market in 2017 by analysing the condition of the employment market and unpacking the positive and negative news, in-demand skills, notable trends and contract rate figures.

Victoria concluded: “There has also been an increase in the number of Fixed Term Contracts available, particularly within small and mid-tier organisations and perhaps some of the uncertainty from 2016 seems to have given contractors more interest in longer term contracts which tend to offer more security.”