Freelancers who search online marketplaces for contracts may be interested to learn that Elance has just secured funding worth £10.3 million to aid its growth plans.

The global work platform is expecting more businesses to take advantage of the cloud to increase their contingent workforces.

Existing investors Kleiner Perkins Caufield and Byers and New Enterpise Associates have been joined by the Stripes Group to provide the capital for expansion.

Elance’s chief executive, Fabio Rosati, said there is a clear structural shift away from the traditional 9-5 office based employment model.  Contractors can now choose to work online with several clients and organisations are making it part of their core business strategy to hire online teams. He went on to say that the new investment will help Elance keep abreast of demand and continue to be innovative in its approach to work.

Since 2010, Elance has seen an increase of more than 120% in the number of professionals working through its platform. Furthermore, the company’s European Online Employment Report for 2011 showed the freelance market in the UK is booming with 55% more businesses hiring online.

The UK comes in at number one amongst the European countries hiring online workers, and in the third quarter of last year, it was third worldwide. In the European league table, Germany comes in second place, followed by Switzerland and Holland.

Businesses in London hire the largest amount of contractors through Elance, but the popularity of the site is also growing rapidly in Birmingham, Reading and Edinburgh.

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Umbrella contractors in the construction industry could be amongst those to benefit from the government’s decision to let the High Speed Two rail link go ahead. It is thought that HS2 could lead to the creation of as many as sixty thousand jobs.

HS2 Ltd released a statement saying thousands of jobs will be created by the scheme, while a leaflet from the Department for Transport optimistically says that tens of thousands of new opportunities will be forthcoming, particularly at West London’s Old Oak Common and Eastside in Birmingham.

Last November, a government transport committee said that HS2 would create 40,000 jobs in London. Around half of these will be at Old Oak Common, which is in the Hammersmith and Fulham borough.

Colin Buchanan, a town planner, says the project has the potential to create more than 115,000 employment opportunities across North-West London. HS2 is expected to create a further 22,000 jobs in the West Midlands.

Councillor Mark Loveday explained that HS2 will deliver much needed employment opportunities in one of the poorest areas of London and the government recognised that the case for an interchange at Old Oak was overwhelming. According to a spokesman from Hammersmith and Fulham, the area around Old Oak has an unemployment rate of around 50% and some parts class as most deprived.

The leader of Birmingham City Council, Mike Whitby, says HS2 is probably the most important opportunity the region has seen for economic growth for generations.

Construction of HS2 is scheduled to begin in 2017 and should be operational in 2026.

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The REC is keen to encourage the government to take action to help Britain’s unemployed youngsters, some of whom might become umbrella company employees, obtain meaningful employment.

The Confederation has now sent a letter to the Deputy Prime Minister, Nick Clegg, explaining that recruiters have a vital contribution to make in promoting the recently launched Youth Contract scheme.

Under the scheme, employers will receive up to £2,275 from the government for each person between the age of 18 and 24 they take on from the Work Programme. The CBI first put forward the idea, although the REC did campaign for the government to provide incentives for job creation back in 2010 as part of its Youth Employment Taskforce.

The director of policy and professional services at the REC, Tom Hadley, explained that the Confederation have been pushing for monetary incentives for two years. Whilst it might be limiting to focus incentives just on those who qualify for support from the Work Programme, it is an important step in the right direction. The Government is now prioritising the problem of youth unemployment and concrete measures are being taken to tackle it.

He went on to explain that recruiters are already working with schools and colleges and also promoting the benefits of internships and apprenticeships to their clients. The REC’s Youth Employment Charter aims to highlight this contribution and stimulate more activity.

The government still needs to devise an effective network that will provide careers guidance for the UK’s young people. However, Hadley points out that recruiters can also be relied upon to provide advice to jobseekers and help them decide which career path to follow.

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Umbrella company contractors who have undertaken psychometric tests might be interested to learn the Talent Q believes some recruiters are misusing them.

The workplace assessment specialist went as far as to say that recruiters could be jeopardising their employer brand if they do not use the tests correctly.

An increasing number of organisations use the ability and personality tests to sift and select candidates. But recruiters do not necessarily explain the relevance of the tests to the applicants. Furthermore, they do not give the candidates any feedback, which is a breach of the British Psychological Society’s requirements.

Some recruiters do not have a centralised record of the data collected from psychometric tests and this results in duplication, leading frustrated candidates to think the employment agency is inefficient. Candidates are also entitled to an explanation if their application was unsuccessful, and all too often they blame the tests, even though other factors may be to blame.

Talent Q UK’s chief executive, Steve O’Dell, said job applicants are getting a bad experience from recruiters who misuse psychometric tests. This can cause irreparable damage to the recruiter’s brand and reputation.

It is good practice to provide clear information about what the assessments are designed to achieve, and help contractors plan proactively to take them. Assessments should be relevant and feedback should be provided throughout the entire application process. The company also said that a verification test should be conducted when the applicant reaches interview stage.

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The eyes of the world will be on the UK this year and PAYE umbrella company contractors have a role to play in promoting the contribution small businesses make to the country’s economy.

2012 sees the Queen’s Diamond Jubilee, the Olympics and the Paralympic Games. All of these events are likely to draw visitors to the UK from every corner of the globe and provide a welcome boost to the UK economy.

The Forum of Private Business has now launched the Get Britain Trading campaign, which aims to encourage the Government to help small businesses trade on a local and global basis.

The FPB’s Get Britain Trading manifesto focuses on four keys areas, simple and proportionate tax, improving cash flow, creating opportunities for growth and creating jobs and improving skills.

David Cameron frequently says that small businesses will drive the private sector recovery, but they need the right trading conditions if they are to expand and create much needed jobs. One of the best ways to achieve this, according to the FPB, it to reduce the amount of bureaucracy small firms have to deal with. More than 50% of SMEs believe their business would develop if they had less red tape to contend with.

Simplifying employment law would encourage small businesses to take on additional staff and help absorb public sector redundancies. But the UK also needs to plug the ever widening skills gap and the Get Britain Trading campaign is calling for a review of the education system so that young people are work ready when they leave school or university.

Contractors can pledge their support for the campaign by signing up on the Get Britain Trading website.

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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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Umbrella company contractors might be interested to learn what the REC thinks lies ahead of us as we enter into the New Year.

Last week, the CIPD predicted that 2012 would be a difficult year for many as the jobs market continues to deteriorate.

The chief executive of the REC, Kevin Green agrees that the jobs market will stay fragile for the first few months of the year but warns that we should not be overly pessimistic, as this will dent employer confidence.

He went on to explain that small businesses will drive job creation and they may not have been included in the CIPD’s assessment as many do not have HR departments. REC research has shown that although employers remain cautious over hiring permanent staff, many are considering increasing their headcount this year. Many recruiters are also reporting a skills mismatch and the lack of suitably qualified candidates is creating shortages that must be addressed this year.

The outlook for contractors and temporary workers looks good as businesses continue to take advantage of the flexible workforce. The latest REC Jobs Outlook discovered that at least 80% of employers intend to maintain or increase the size of their temporary workforce this year.

Green went on to say that he expects unemployment to peak at about 2.75 million and demand for staff will continue, particularly at the top end of the labour market. Furthermore, the private sector should be able to absorb public sector redundancies by the end of the year.

The current crisis in the Eurozone is denting confidence and a speedy resolution is needed to encourage business investment and bank lending. This would kick-start job creation and ensure the jobs market had a better year, he concluded.

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There are concerns that small businesses will adopt a ‘hire and fire’ culture if proposed reforms to employment laws go ahead.

More than 75% of employment lawyers think that small businesses will hire and fire, according to research by Contact Law, the find-a-solicitor service. 67% of the employment lawyers questioned for the survey said the new proposals were not workable and only 8% were in favour of the whole raft of changes.

The government proposes to overhaul the employment tribunal system in the hope of saving employers £40 million every year. It has also called for evidence on whether businesses are restricted by the minimum consultation period, currently 90 days, for collective redundancies.

73% of those surveyed said the reforms will not encourage SMEs to hire more staff, and 63% believe the changes would have no affect on the way small firms treat their employees.

About 33% of respondents think small businesses will lose out on talent if the reforms go ahead because jobseekers will be concerned over job security.

Therese Wallin, a legal expert at Contact Law, said the business secretary’s proposed reforms are causing a lot of debate in legal circles. The industry is backing some of his proposals, but others are not so popular.

Vince Cable has said the changes would not lead to a hire and fire culture, but the majority of lawyers disagree. Rather than helping the small business community, these reforms could adversely affect it and it’s hard to see how they can be implemented without facing a lot of resistance, she added.

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Last week’s unemployment figures made depressing reading for everybody, including umbrella company contractors.

Data from the Office for National Statistics showed that 2.62 million people were unemployed in the third quarter of this year. Youth unemployment is a matter of grave concern, with the figures showing that 1.016 million young people are now without a job.

Kevin Green, the chief executive of the REC, was clearly distressed with the youth unemployment figures and said the government needs to take urgent action to rectify the situation.

He reiterated his calls for a National Insurance holiday for small businesses that hire young people. Furthermore he urged businesses and recruitment experts to raise awareness and create better avenues into work.

Government policy must revolve around jobs and growth, he continued, and George Osborne’s Autumn Statement later this month must kick-start the process. The government must start taking real action – just talking about it is no longer good enough.

Will rising unemployment be enough of a deterrent to stop workers looking for pastures new? According to a study by Train4TradeSkills, more than 25% of workers are dissatisfied with their current position and the majority of them intend to make a career change within the next five years.

Top of the dissatisfaction table comes people working in the retail sector. With only 14% saying they are very satisfied in their job. People in the leisure and hospitality sector are the most satisfied, but at only 27% the percentage is still not high.

Interestingly, 46% of the employees questioned for the survey said they wanted to be their own boss. With unemployment continuing to rise, self-employment may be the only option available to the UK’s dissatisfied workforce.

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What measures would umbrella company contractors like to see laid out in the Chancellor’s Autumn Statement?

The business community has compiled its “wishlist” ahead of George Osborne’s speech on November 29^th. Not surprisingly, credit easing features on this list, along with less bureaucracy, super-fast broadband and tax changes for R&D.

The Chancellor’s Autumn Statement outlines measures designed to stimulate our fragile economy and will come at the same time as the Office of Budget Responsibility releases its new economic forecasts.

Small businesses in particular will be hoping to see a bold, affordable and readily available initiative to enable them to access much needed credit. As the FSB points out, the smallest businesses get the worst deal when it comes to lending; they pay the highest rate of interest and are most at risk of refusal.

John Walker, the chairman of the FSB, explained that micro-businesses must be able to benefit from credit easing. However, because the high street banks already dominate the SME market, many firms are put off applying for finance simply because they expect to be refused.

The EEF agrees that measures must be taken to help companies obtain credit.  It points out that in order for the economy to grow, firms must be able to access the finance and skills necessary to help individual businesses expand.

The Forum of Private Business would like to see the Chancellor reduce the burden of employment law. The Forum claims its legal helpline has been bogged down with calls since new employment regulations came into force at the beginning of October.

A lot of businesses believe the best thing the Chancellor could do is reward companies that create job opportunities with a lower rate of tax. Entrepreneurs are the lifeblood of the UK economy, said Andy Raynor of RSM Tenon, and yet they are paying the highest level of taxes in 30 years.

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As we get nearer to the festive season, some workers, including umbrella company contractors, could be tempted to do their Christmas shopping online during working hours.

ELAS, the business support specialist, claims that companies will lose £5 billion as emails offering discounts will tempt workers away from their daily tasks and into the online marketplace.

When employees first arrive at work they automatically check their email. Some then spend up to an hour reading discount emails and shopping around for the best deal before redeeming their discount vouchers.

Peter Mooney, ELAS’ head of employment law, explained that more and more people are doing their Christmas shopping online. In the past, the majority of employees have been sensible and browsed the Internet during their lunch break or at the end of the working day.

However, we’ve recently seen an explosion in sites such as Groupon, offering huge discounts, and these entice people to start shopping early in the day.

ELAS says it expects that in the run up to Christmas, people will spend an average of half an hour a day online shopping from their desk. Based on an average £12.60 hourly wage, that would equate to £5.3 billion over the next 40 working days.

Even those who shun online shopping for the high street are likely to have spent working time browsing for ideas or looking for the best prices, Mooney added.

Although bosses do not want to play Scrooge and further dampen the morale of their employees, time is money and online shopping is going to hit productivity at a time when many businesses are still struggling to recover from the recession.

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Prospects aren’t looking too bad for contractors at the moment, but unfortunately the UK’s young people are still struggling to find employment.

Albert Ellis, from recruiter Harvey Nash, has echoed the calls of the CBI for the government to provide tax breaks for companies that hire young people.

The UK has nearly 1 million unemployed youngsters and the CBI wants the government to waive the first £1,500 of an employers National Insurance bill in return for hiring a jobless 16-24 year old.

Ellis says this would effectively mean that for every ten young adults a company takes on, it gets one free. He went on to say that his own company would take on additional graduates if the tax break were implemented.

Furthermore, Ellis believes that employers would take on more young people if the National Minimum Wage were frozen.

The REC has also been a long-term proponent of a National Insurance holiday for small businesses.

Kevin Green, the chief executive of the REC, was recently engaged in discussions with the business and enterprise minister, Mark Prisk. Green explained that the REC has been asked to draw up proposals to encourage companies to hire young people.

The Confederation will continue to push for government action, as well as showcasing the positive role recruiters play through the REC’s Youth Employment Charter. Nearly 100 REC members have already signed up to the Charter, which aims to work with schools and colleges to raise awareness of the opportunities available to the future workforce.

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