Contracting Matters

The CIPD have today issued a news release which states that any post-election spending cuts could lead to 500,000 job losses in the public sector and that this in turn could have a potentially damaging effect on the umbrella company marketplace.

It is possible that public sector cuts could affect the Recruitment industry as a whole but in general, Contracting is anti-cyclical and the steady uptake in the private sector could counter balance any public sector fall.

If an umbrella company has a critical exposure on public sector contractors via, say, a specific Agency then there could be issues.

I think it is also important to mention that the definition of a public sector contractor is also relevant. There is a marked difference between an agency nurse (for example) and an IT contractor being used on an NHS project. In that example, and there are many, there is a key difference about where the impact will be most felt.

I predict a stable year for the professional umbrella company despite continued land grab strategies (free offers and high incentives to join) at the other end of the market.

Tags: contractors, economy, employment law, recruitment, Umbrella Company, umbrella company news