CBI: Flexible contracts underpin growth and jobs

Matthew Fryer

Brookson

Accountant, Tax Adviser

A recent survey has highlighted the vital role flexible contracts play in underpinning growth and creating new jobs.

The CBI/Accenture Employment Trends Survey showed more companies now expect to create jobs in the next 12 months than has been seen since the onset of the recession in 2008.

Umbrella companies will be in high demand, as contractors look to take advantage of the growing body of opportunities in the UK.

Indeed, 51 per cent of firms expect their workforce to be larger by the end of next year. Private sector jobs will increase across all regions, with Yorkshire and Humberside and the East Midlands the most buoyant markets.

Katja Hall, Confederation of British Industry (CBI) chief policy director, said: "We’re starting to see the recovery have an impact on business plans to hire, with more than half of firms boosting staff numbers next year and more opportunities for young people.

“It’s good to see jobs being created across most regions, not just London and the south-east. Our labour market performed well throughout the recession and pay caution and flexible contracts will continue to underpin growth.

"For the UK to remain an attractive place to do business, as the recovery takes hold, wage growth must go hand-in-hand with growth in productivity."

The survey revealed that jobs for permanent staff are increasing more rapidly than temporary jobs, however. Permanent positions have a net balance of 18 per cent of firms planning to increase hires. Conversely, just 14 per cent intend to grow their temporary workforce.

However, 20 per cent of organisations are intending to increase their graduate in-take over the next year, while four in five firms expect new opportunities to open up for young people in the current year.

This will help to address the skills crisis looming in the country. "The skills agenda is critical to not only sustain this growth but to make it inclusive, increasing employability and opportunities for young people who are not in a job, training or education," Olly Benzecry, managing director for Accenture in the UK and Ireland, said.

He added that businesses are starting to recognise the value of closer collaboration with education, not to mention more vocational training and apprenticeships.

The survey observed that 97 per cent see flexible employment patterns, such as use of agency workers and zero-hour contracts, as vital or important to the UK economy.

Participants explained that they allow companies to cope with fluctuating demand and rapidly respond to growth opportunities, with 87 per cent and 81 per cent citing these respectively.

Fifty-eight per cent claim flexible contracts act as a stepping stone into work for the long-term unemployed.

Meanwhile, 65 per cent recognise the ability of flexible contracts to offer an alternative to those that don't want full-time work.

"Most businesses believe that flexible employment patterns, including agency and zero-hours work, are a critical tool when demand fluctuates and a firm needs to react quickly. These contracts create opportunities for people looking for work that might not otherwise exist, and also attract investment to the UK," Ms Hall said.

Matthew Fryer

Brookson

Accountant, Tax Adviser

I am a chartered tax advisor with a specialism in the freelance contractor sector advising contractors on how to structure their affairs and recruitment businesses and end hirers on the effective…