The UK is suffering from a decline in human capital according to data from the Office for National Statistics, and this could benefit contractors working through an umbrella company.
UK economy statistics use the term human capital to represent the value of skills and knowledge in the workforce. In the first few years of the twenty-first century, this value grew at the rate of about £425 billion each year. During the recession, this dropped to an annual growth rate of £120 billion but by 2010, human capital plunged by £130 billion. This indicates that fewer members of the UK workforce have the skillsets that companies require.
Jonathan Portes, a director at the National Institute for Economic and Social Research, said that if the government allows the unemployment rate to stay high for an unnecessarily long period of time, human capital will be damaged and this will have an adverse affect on long-term employment and growth.
Umbrella companies could see this as positive news. A lot of their clients have the knowledge and skills that many top-level firms are demanding. Contractors with skills in engineering and manufacturing could find themselves in high demand this year as companies look to the flexible workforce to plug the skill gaps that exist in their businesses.
IT contractors could also find themselves in demand as both employers and recruiters have already expressed concerns about the lack of suitably qualified candidates for system development and project management roles.
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