Concerns over age discrimination legislation are leading more businesses to consider freelance support.
It is now illegal in the UK for companies to discriminate in recruiting staff on the basis of their age. The new rules came into force on October 1 2006 and required employers to review their employment policies across the board as the regulations prohibit direct and indirect discrimination on the grounds of age in the areas of recruitment, promotion and training.
Whatever the rights or wrongs of the legislation, there is a definite upsurge in interest in using contractors. Freelance recruitment specialists people4business.com saw enquiries from companies about using freelance skills for specific contracts increase by 74 percent in September 2006 compared to the same period in August.
One possible reason for this is that a company’s focus in engaging a freelancer is entirely on their skills and competences – something which is fully compatible with the spirit and the letter of the new legislation. This is all the more the case when on-line recruitment services actually prevent potential recruiters from seeing the age, gender or ethnic origin of an applicant.
What the latest regulations have succeeded in doing is to focus attention on one simple fact – that it is people’s skills that matter, not their age. UK businesses are facing unprecedented challenges from overseas competitors, and companies are increasingly looking to leverage competitive advantage through knowledge and know-how as well as through cost.
In such an environment, UK businesses will increasingly look to ‘flex’ their employment cost-base while at the same time ensuring that they have access to knowledge and innovation in order to deliver value-added products and services to customers.
This requirement to ‘flex’ costs, yet still retain high level skills, has been a key contributor to the growth in self-employment. In 2003 alone, there was an increase of 8.9% in self-employment, compared to an increase of 0.1% for employees. Earlier this year, the Office for National Statistics revealed that of the 76,000 jobs created in the second quarter, self-employment accounted for almost half the increase while three quarters of new jobs for employees were temporary,
This trend towards self-employment has occurred for both men and women and across all industries, but in particular in banking, finance & insurance; construction; and education, health & public administration.
As a consequence, the freelance market in the UK alone is now worth in the region of £35 billion per annum and is continuing to expand.
Employment legislation makes it difficult and expensive to quickly flex the permanent workforce to match demand, so employers increasingly recognize value in the freelance marketplace, where contracts can be determined by duration, performance and outcomes and terminated in accordance with the terms of the agreement and without reference to legislative procedures.
While hourly rates in the freelance market tend to be higher, the cost savings associated with staff recruitment and employee overheads make freelancers and contractors a competitive source of skills and expertise on a project basis.
The flexible labour market is here to stay, and represents a classic win-win situation in the UK economy. Benefiting both businesses (Buyers) and freelancers (Sellers) in the services marketplace.
Duncan Taylor is a director of people4business.com. He previously held high profile roles at Reed Business Information and at Guardian Newspapers. people4business.com provides a transparent ‘end-to-end’ trading environment where businesses can search for the skilled services they need, and then agree and process contractual terms direct with the seller.
www.people4business.com
