Why are significantly fewer young people becoming contractors?

As the ‘Freelancer & Contractor Services Association,’ it might not be the sort of thing which you’d expect us to point out because, as our name suggests, we’re rather into promoting and supporting the independent work sector.

But the numbers of young people making their way towards our economically-important sector and actually entering it is a problem, and a growing cause of concern, writes Deb Murphy, head of operations at the FCSA.

Majority of temps set to retire between 2028 and 2038

The starting point of this problem is that although the age for state pension eligibility has increased, within the next 5-15 years potentially more than half of the temporary workforce will be in a position to retire. And our figures further indicate, that already significant majority could expand to an even larger proportion, if some independent workers choose to hang up their contracting spurs earlier than the norm.

Those who like the cyclical nature of things say to me ‘Surely the next generation(s) will just back-fill the gap?’ But a look at official data indicates no, it seems young blood won’t back-fill.

Not even two per cent of contractors are aged 16-20

In fact, the latest figures from FCSA surveys show that less than two per cent of contractors and freelancers are aged between 16 and 20-years-old. Worryingly, this figure appears to decrease each year, with school and college-leavers choosing to pursue higher education, or work in non-technical roles, rather than starting a vocation or trade. 

Organisations, companies and recruiters advertising job vacancies with the underlined requirement of ‘numerous years’ experience’, and the generally high expectation that the worker is already perfectly capable of doing the role, further restricts the possibilities for the upcoming generations.

The other issue is; when the role is only for a short period, it is no wonder the hirer needs someone who can jump straight in, virtually immediately!

Government tried with T-levels

In 2020, the government launched ‘T-levels’ in an effort to upskill students and prepare 16-to19-year-olds for working life. T-levels provide an opportunity for students to spend 20% of their time ‘on the job’ gaining valuable hands-on experience, in sectors commonly using short term contracted staff such as education, construction and healthcare.

Unfortunately though, across the courses offered, more than half of T-level students dropped out, choosing to either restart their college year learning a different subject, or finding permanent roles in industries, such as hospitality or retail.

The effect? Another cohort without the skills required is created.

Retention and upskilling ought to be a bigger focus

Should they be in the fortunate position to already have staff filling their key positions, employers may not see the urgency of good succession planning.

But with a risk that in the not-too-distant future vacancies will be even harder to fill, employers should carefully consider how to not only retain their current talent, but how to upskill them to help fill the knowledge gaps left by the departing older generations.

Ominously, it’s not apparent to me that either is happening in any great volume.

Hopes are with Hunt

Apprenticeships are an option worth consideration -- and we may see these addressed at Autumn Statement 2023. One of the appeals of apprenticeships is that although the employee needs 20% of their working week to comprise ‘off the job’ training, the skills and knowledge gained will reap rewards in future years. However, we’re aware that many in our sector want apprenticeships reformed in many different directions, so chancellor Jeremy Hunt has his work cut out in this area to please everyone.

More concerning to him, I suggest, is that while there will always be people who choose to leave the ‘rat race’ of permanent employment (Mr Hunt himself set up his own company and did PR for tech firms), the pipeline looks poor. Those who do seek the benefits that the contracting world offers would need a drastic swelling in their ranks in future years, if we are to match the number of contractors operating in the UK today.

So, it leaves a weighty question unanswered.

How can the temporary market ensure that in future years there are enough contractors available to fulfil the requirements of UK plc at the time, if the youth of today are not tempted by the unrestricted possibilities of freelancing?

Final thought

Quite possibly, one too many shackles being imposed on the workers themselves, by one too many chancellors, have started to dull the allure that this fiscally-vital way of working needs to maintain, if our country’s organisations are to continue to have true flexibility in their staff resourcing. Let’s hope Hunt recognises this when he gets to his feet on November 22nd.

Profile picture for user Deb Murphy

Written by Deb Murphy

Deb Murphy has worked within compliance for over 15 years, both in operational and technical roles.  Prior to joining FCSA, Deb worked within the insurance sector, before moving to an umbrella, CIS and accountancy provider. As head of operations at FCSA, Deb is responsible for the actions behind the scenes including membership, compliance and events. 

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