Umbrella working offers better rates of pay, says FCSA

Umbrella working is being adopted by an increasing number of high-end professionals in a diverse range of occupations, according to research by the Freelancer and Contractor Services Association (FCSA).

Key findings from the study, which compares umbrella working in 2015 with 2017, show that the average assignment rate has risen significantly over the last two years, with 73% of umbrella workers earning £15 per hour or more, compared to 53% earning the same rate in 2015.

The average length of an assignment has also doubled in the last two years, with umbrella employees, on average, working 29 weeks per assignment, compared to just 14 weeks in 2015. It was also found that the average length of employment has increased by over 50% since February 2015, with contractors staying with their chosen umbrella for 46 weeks on average, compared to 30 weeks in 2015.

Around 7% of the UK’s umbrella employees are within the construction sector, a drop of 14% since 2015. However, there has been an increase in umbrella working within health and social care which now has 17% of all umbrella employees, compared to 6% in 2015.

Commenting on the significant changes over the last two years, Julia Kermode, Chief Executive of the FCSA, said: “Our evidence shows that the umbrella marketplace has matured a lot over the past two years. Umbrella employees are enjoying a better and higher rate of pay, longer assignments and are showing more loyalty to their chosen umbrella employer. 

“All of this indicates that the market has developed in the last few years and offers stability to those who choose it. The facts speak for themselves; with higher rates of pay, longer assignments and longer employment tenures, umbrella is a lot more secure than the numerous other precarious ways of working that we see in the UK today. By working through an umbrella company, contractors enjoy all the benefits and rights that come with being an employee; they are happy with this way of working with our research showing that many contractors stay with their umbrella for almost a year (46 weeks) nowadays, which is 53% longer than the average (30 weeks) two years ago.