Our Insights into the Digital Contractor Market

In the current candidate-short market, contract workers have more opportunities available to choose from than ever before.

An increasingly unstable financial climate coupled with a shortage of skills means that contractors can earn significantly more than they would be working within a permanent role and, as a result of this shortage, the demand for contract workers is soaring.

But, for both candidates and businesses alike, there are a number of factors and impacts to consider when hiring for or accepting a contract position. Current market trends, legislation, and the cost and time-saving considerations of working with or as a contractor all have the potential to significantly impact the state of the market and the viability of these positions. To get their insights on the contractor market, we spoke to 3 of our Digital & Tech consultants here at Heat about their experiences operating within the sector and their observations around how these factors can impact contracting on the side of both clients and candidates.



“When considering whether to work on a permanent or contract basis, the most attractive benefit to working on contract is undeniably financial.

As a specialist offering your services, you will be able to charge a higher rate and earn more than a permanent employee, as well as enjoy the flexibility and variety of determining the work you carry out and the positions you opt to take on. But as well as this, there are significant freedoms and benefits to working as a contractor beyond the financial considerations. When working on a contract, you are able to choose from a wide variety of roles and exciting new roles, experience a much wider breadth of different businesses, immerse yourself fully into an assignment for a limited period and achieve the satisfaction of completing this significant piece of work before moving onto the next one. In short, your working life will never stagnate, you will never need to become involved in the rigmarole or business politics that can often be associated with working as a permanent employee, and you will always be in the position of finding new stimulating and engaging assignments to work on.

Moreover, because of the massively increased demand for contractors we are seeing at the moment, the pace of hiring is rapid: so much so that we are ordinarily able to place a candidate the same day they come onto the market. Generally speaking, we find that the longer 12-month contracts are naturally more attractive to candidates because of the stability they offer, but we frequently place candidates on 6- or 3-month contracts as well. At Heat, our specialist contractor services include an online timesheet portal with weekly payroll service, contract and regulation advice, interview preparation, and ongoing care from a dedicated contractor care consultant throughout your assignment.”

Marcus Knapp – Managing Consultant, .NET (Midlands)

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“The changes to IR35 have had a significant impact on the contract market, and there is still some uncertainty surrounding the legislation and the impact it has.

The onus is now on businesses to determine the IR35 status of contractors, rather than the contractor themselves. This can present a stumbling block for businesses looking to take on contractors for their projects, who are wary of making an incorrect assessment and seeing repercussions from HMRC. In fact, data supplied by Kingsbridge found that ‘50% of end clients reported IR35 as the biggest obstacle to hiring contractors in the past 12 months’ and, equally, 75% of recruitment businesses have indicated that their pool of contractors has decreased since the reforms to IR35 were introduced in 2021 (Kingsbridge Group Whitepaper).

These reforms to IR35 have made it even more vital for us to have a thorough, legitimate, and precise process for determining the status of roles. Through our ongoing partnership with QDOS, this is exactly what we are able to offer. Our partnership allows us to streamline the entire process of IR35 determination, with integrated dispute features and a thorough assessment tool that is accessed by both parties and ensures that both end clients and contractors are involved in the decision-making process. Their team is comprised of specialist IR35 lawyers and consultants who will conduct a case-by-case status review and verified IR35 assessment which will determine the status of roles on our behalf, ensuring compliance is maintained throughout the engagement and giving peace of mind for both our candidates and clients.”

Dan Chadwick – Director
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“One of the most debated issues when it comes to contract hiring for businesses is whether the benefits of hiring a contractor outweigh the associated cost of doing so.

In my experience, the biggest negative cost-effect for any business is not having an employee you urgently need on board. Business continuity is massively affected when you have a worker requirement, particularly in the current skill-scarce climate. Many of the companies I speak to have been looking for permanent employees for over a year, and they’re having to turn down projects and this is impacting them hugely in the long term when, if they hired a contractor on a temporary basis, their existing permanent employees would be freed up for other projects and the business could continue operating at the correct level. The biggest consideration for businesses should always be the time versus cost savings that can be made when choosing to hire a contractor. You have to pay a premium for contract workers, but you’re paying that premium because they are specialists in their chosen field and are experienced in jumping into new projects and adding value from day 1 with little to no training. When working on a specific project basis, this saves the business time and even costs long term.

Equally, one of the significant benefits of working with a recruitment consultant to source a contractor is that we are able to take a consultative approach, advise on the market and work to your budget. I’ve had experiences in the past where clients of mine have assumed they wouldn’t be able to afford to take on a contractor, but I was able to find a number of candidates within their budget. So, my advice to any clients who can’t find permanent employees, particularly those who have been looking for a considerably long time or have time-sensitive work, would be to take on a contractor in the meantime whilst we continue to search for a permanent employee for you. In the long run, this is undoubtedly the option that has proved to be the most cost-effective for clients of mine.”

Damian Speirs – Associate Director, Microsoft Technologies (.Net, C#, ASP.NET, Azure)

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If you’d like to discuss hiring a contractor to support your business, or discuss the contract positions that we have available, feel free to connect with our consultants via the links above or get in touch with our respective divisions below to find a specialist who can assist you.

Digital & Tech: Digital@HeatUK.com
Engineering: Engineering@HeatUK.com
Public Sector: Public.Sector@HeatUK.com