The UK is experiencing a critical skills shortage as unemployment falls to the lowest level since 1974.

New data from Office for National Statistics (ONS) shows that the rate of unemployment in the UK fell to just 3.6 per cent in the three months to July 2022.

As a result, many employers are struggling to find candidates for critical roles in their businesses, particularly in highly skilled or specialist areas.

So, what is the solution?

According to a new study, more than three-quarters of employers are turning to contractors to fill the gaps in their workforce, as part of a new approach to doing business.

Why does this matter to you as a contractor?

Knowing why employers want to utilise the services of contractors and freelancers empowers you to make a better case during the hiring process, so you can secure a contract – and in some cases, increase your rate.

Here are the top five reasons why employers favour the services of contractors:

Less risk – Hiring the wrong person can be a costly mistake in several ways. The longer the person remains ‘in post’, the more these issues are compounded and inevitably when they leave or are removed from their position, businesses need to reinvest time and other resources into hiring someone new.

A bad permanent hire can drive down productivity, hurt morale, and even drive away work and other key employees.

In comparison, the relationship between contractors and engagers is more flexible. If a business hires the wrong contractor, it may be easier and cheaper to terminate a contract and find someone more suited to the role.

Increasingly, even where contractors are performing well, businesses like the flexibility that freelancers offer, as they can scale back on their workforce quickly if their economic position worsens.

Speed – Contractors can be taken on faster than permanent hires and it typically costs less to onboard them. It is amazing how much resources and time go into a permanent hire. Add on to this the need to embed them within the work culture and train them, and it is clear to see the headaches that employers face.

Whilst there is a degree of onboarding required for contingent workers, more often than not experienced contractors can come in from day one and fulfil a role thanks to their existing skills and experience.

Broadening talent – Finding and recruiting the best talent can be a challenge and, in this talent-scarce market, many of the most skilled individuals are increasingly recognising the professional, financial and lifestyle benefits of contracting.

To broaden their pool of talent, many employers have no other options than to seek out the support and services of freelancers.

Thankfully, the move to remote working means that the geographic barriers that may once have stood in the way of finding the ideal candidate no longer exist within many roles – bringing new flexibility and accessibility to the job marketplace.

A change of approach – Given the challenges and benefits outlined above, many businesses are already changing their organisational design to incorporate contractors so that they are more agile.

By adopting a greater contingent workforce, businesses are finding that they can adapt better to change, and HR can flex their teams for a business’s dynamic needs.

In fact, according to the report, more than one in three businesses using contingent workers say they do so to improve their agility (36 per cent).

Filling a gap – Sometimes the reason for hiring a contractor, even for a short period, is more practical. As the great talent search continues, employers are using contractors and freelancers to fill temporary gaps in their workforce until they can make permanent hires.

Similarly, with more people taking career breaks and time off for maternity, paternity or adoption leave, a short-term contractor is a great solution to quickly fill a role, without the complexity and cost of a permanent or semi-permanent hire.

Even if a business has a short-term requirement, such as specialist skills to complete a one-off project, then hiring a contractor may make more sense than creating a full-time, permanent role.

That is why 75 per cent of corporate finance leaders questioned said they see contractors as an important part of their company’s recruitment strategy.

Armed with this useful information, you should now have an even stronger position to go out there and win new, more lucrative work – don’t sell yourself short.