Contractor agencies divided over Brexit's impact

Brexit will not just give contractors and other freelancers who come without overheads a boost in the short-term due to the uncertainty among hirers that it creates, a survey indicates.

Forty-two per cent of recruiters say they expect demand for contractors to increase in the long term, once the UK has left the EU, found ADVANCE. Only 15% said they anticipate a fall.

Managing director Shaun Critchley said: “The labour market has been ticking along pretty much as normal since the referendum and will continue to do so until we have actually left the EU.

“It’s at this point -- with the anticipated restrictions on immigration -- that recruiters expect to see a spike in contract and temporary hires.”

Although currently undefined, these ‘restrictions’ make one agency believe that visa applications to work in the UK will increase by as much as “ten-fold”.

Employed by one of the agencies which ADVANCE surveyed, which included those in key sectors such as engineering, IT and technology, the staffing agent added:

“People will be less inclined to work here or in Europe on short contracts”. Another agent asked: “Why would we, as a country, want to narrow our choices of candidates to those who live in the UK?”

This questioning agent is likely to be among the one in five recruiters who, when quizzed about likely demand for contractors as Brexit negotiations take place, say they are “unsure.”

About the same proportion report contractor demand has fallen since the Brexit decision, in June, compared to 27% who said it has increased. Most (52%) said it had held steady.

Not everyone is convinced that the future holds the same or better for contractors. A City recruiter said Paris and Berlin “will use Brexit to woo financial institutions to relocate” to them. He said the impact on London could be “devastating.”

But another agent, also in banking and finance, countered: “If there is an exodus of financial services roles to Germany and elsewhere it will be limited…to some back-middle office roles”.

The recruiter insisted it will not be “the mass exodus being bandied around”, because there is “no doubt the Fintech space will more than make up for any shortfall” in reduced contractor numbers.