Mass Contractor Terminations
A survey of multiple recruitment agencies (110) by APSCo shows that there will be mass contractor terminations by the end of the month.
These terminations are mainly caused by IR35 and the coronavirus Covid-19.
Questions on Mass Contractor Terminations
- How many contractors will be terminated according to agencies?
- How does this compare with previous downturns for mass contractor terminations?
- What skills are in greater demand?
- What do the mass contractor terminations include?
How many contractors will be terminated according to agencies
An astonishing 24% of recruitment companies say that over half of their contractors, have been, or will be, terminated by March 29%.
That’s an astonishing number. Indeed, 13% say that over 75% of their contractors will be terminated by then.
Half of all recruitment agencies said that they would lose, or would have lost, 25% or more of their contractors by March 29th.
These are astonishing figures. The culprits are IR35 and the coronavirus.
How does this compare with previous downturns for mass contractor terminations
This is much worse than the last downturn of 2008 when most companies kept their contractors on.
This is more like the downturn of 2002 when more than half of contractors were out of work or the downturn of 1991 to 1993.
During both of those downturns many contractors were expecting that they would never work again as contractors. And it was contractors with the most common skills that were hit hardest.
Both previous mass contractor terminations were caused by bear markets and downturns in the economy.
Many agencies are now contemplating laying off their own staff. 81% of recruitment firms are considering making some of their own staff redundant.
What skills are in greater demand
Only 11% of skills are seeing an increase in demand.
The areas where they are seeing an increase in demand are healthcare, insurance, life sciences, IT – especially public sector IT, public health consultants and funeral businesses.
Those increases in demand in IT are only in a few areas. But the public sector looks to be in good health.
Permanent placements are being put on hold for the most part.
What do the mass contractor terminations include
One presumes that some of those contractors terminations include those contractors who are refusing to sign PAYE contracts.
It looks as if contractors will have to batten down the hatches over the next few months. Let’s hope it isn’t as bad as 1992 or 2002.
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