The result of this week’s EU referendum may have a positive impact on demand for contractors, whatever the outcome, according to SJD Accountancy, the leading accountancy provider to contractors.
SJD Accountancy says that it is neither endorsing the ‘leave’ nor the ‘remain’ campaigns. It points out, however, that while there may be negative consequences for the UK economy and the availability of job opportunities in the event of Brexit, for contractors the position is more complex than it is for permanent employees.
For example, if the ‘leave’ camp prevails and the UK government begins the protracted process of negotiating an exit, that period of transition is likely to make employers wary of taking on permanent staff, potentially making contractors a more appealing option.
An exit would also likely create a lot of one-off business transformation projects for financial institutions and other major corporates who transact business in the EU, which again could create opportunities for contractors.
According to the Institute for Economic Affairs (IEA), the claim that three to four million UK jobs are dependent on our membership of the EU is a ‘myth’. The IEA points out that these jobs are associated with trade, not membership of a political union, and there is no evidence to suggest that trade between the UK and European countries would reduce if the UK was outside the EU, reducing demand for skills.
Derek Kelly, Chief Executive Officer of SJD Accountancy, comments: “Forecasting what will happen in the event of an exit is a bit like soothsaying but it is precisely that unpredictability which may benefit contractors. In the event of Brexit, it is likely that we would see a significant increase in change and transformation projects as major corporates adapt to the new business environment. These projects would be fixed-term and ideally suited to contractors.”
“Large companies which trade with the EU are likely to be more seriously affected than SMEs and contractors who primarily transact business in the UK. There are a lot of unknowns, but transitional arrangements could well mean that most British contractors doing business in the EU are able to see out their current contracts.”
What would a vote to remain in the EU mean for contractors?
According to SJD Accountancy, a vote to remain, which would put an end to the uncertainty surrounding the UK’s EU membership, could have a positive impact on demand for contractors as projects which were put on hold in the run up to the referendum are revived.
The ‘remain’ campaign has consistently pointed out how EU membership benefits the UK labour market. In a letter to The Times, chairmen and CEOs of 36 FTSE-100 companies, said that “Business needs unrestricted access to the European market of 500 million people in order to continue to grow, invest and create jobs.”
SJD Accountancy’s internal data, drawn from thousands of contractors in all sectors, shows that the market has steadily improved over the last four years on a range of metrics.
There has been a steady improvement in the daily rates paid for contractors since the end of 2012. Nearly a quarter of contractors (22.5%) have seen rate increases over the past six months, compared to 17.4% this time four years ago. Fewer contractors miss the benefits of being an employee (19% today) compared to 2012 (23.8%).
Derek Kelly, Chief Executive Officer of SJD Accountancy, comments: “There has been a sustained improvement in both the financial prospects for contractors and their life satisfaction over the past four years. Uncertainty in the run up to the EU referendum has cooled the market somewhat, but there are positive signs that the market will be resilient enough whatever the outcome.”