Figures released by the Association of Professional Staffing Companies (APSCo) and Staffing Industry Analysts (SIA) show that freelance contractors are finding it harder to secure roles, as IT contractor use plummets in the face of IR35 uncertainty.

Demand for contractors decreased across many of the trade association’s core sector groups. Vacancies within engineering, for example, slipped by just 6%, while demand within IT and marketing fell more significantly (by 7% and 18% respectively). Finance was the only sector where vacancies for non-permanent roles increased, with demand for contractors up by 11%. The downward trend seems to be specific to contract work, as permanent placements in these industries rose by an average of 10% over the same period, with the finance sector showing a 14% increase.

The overall number of contractors out on assignment, meanwhile, dipped by 17% during the same period. This can largely be attributed to a significant 38% year-on-year fall in IT professionals working on a contract basis during this time.

This is likely to be a result of significant changes around off-payroll working within the public sector which has created a climate where, according to previous APSCo research and other sources, former contractors are turning their backs on working through their own PSCs.

Ann Swain, Chief Executive of APSCo says that proposed changes to off-payroll working rules are to blame for the decline: “While changes to IR35 legislation in the public sector have clearly taken a chunk out of the contract market, a proposed consultation on extending reforms into the private sector means that employers are increasingly weighing up if the perceived complexity associated with managing a contingent workforce is worth it.”

For those contractors able to secure a role, the good news is that pay at least is holding more-or-less steady. APSCo’s figures reveal that median pay across all professional sectors dipped by 2% year-on-year. This figure is characterised by notable fluctuations in terms of sector, with IT and engineering, for example, recording uplifts of 4.1% and 3.8% respectively.

The figures are collated by APSCo and SIA on a monthly basis, and SIA’s executive director of global research, John Nurthen, sees a pattern: “This month is a continuation of previous trends with the employment market showing growth in permanent vacancies but declines in temporary and contract positions. In an increasingly tight labour market, there is plenty of appetite among employers to hire people with the right skills,” he said.

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