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Alternative contracting options

The economic impact of COVID and the uncertain outlook has necessitated employers looking for alternative ways to staff their businesses, other than by using permanent employees.

Permanent employees can be expensive, and if they have not already started doing so, many businesses will need to rethink their workforce strategy.

For most employers this has so far meant dramatic changes to the structure of their workforce and the way their staff work. For some, it has also meant that there is insufficient work to keep all their staff meaningfully employed. Tighter regulation, litigation risk and reputational hazards are making it harder to rely on some of the available alternative contracting options – such as zero hours contracts and “gig economy” type arrangements.

We are inevitably seeing an increase in the use of freelancers, fixed term employees and agency workers for specific projects.  The use of intermediaries (such as agencies and umbrella companies) between the “freelancer” and the end-user organisation is also set to increase further in the run up to, and following the forthcoming reforms to the IR35 rules, which come into effect in April 2021.

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