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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IT umbrella company contractors could be set to benefit from HP’s decision to share more contracting opportunities with smaller UK businesses.

Hewlett Packard, the largest government IT contractor, has said it will increase significantly the number of small sub-contracting firms it uses by the end of next year. This could lead to an increase in demand for individual contractors, as more opportunities become available in the coming months.

HP intends to increase the number of SME subcontractors it works with to 15% within the next two years. The company already works with 600 small businesses and it intends to add a further 150 firms to that list. This will create job opportunities for IT contractors and freelancers who want to work within small groups.

Nick Wilson, the managing director of HP UK, said that a lot of the company’s current spending will be redirected as it moves towards providing significant support to the small and medium sized sector in Britain.

This move by HP could be of huge importance to the IT industry. Small businesses will have more opportunities and even those who do not obtain a lucrative contract from HP may still benefit as firms reassess their workload and clientele. Furthermore, the increase in opportunities in the small business sector will undoubtedly lead to more contracting positions that IT freelancers can take advantage of.

HP’s news is one of the first positive signs that things could be about to improve for the UK’s IT contracting community. We are starting to see green shoots at last!

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HSE Passport, the firm that offers umbrella companies advice with Health and Safety legislation, is urging recruiters to make sure contractors receive health and safety training before they start a contract.

The company says that making sure contractors and freelancers are equipped with the necessary safety knowledge in advance prevents delays and saves money.

When it comes to safety, contractors with an HSE passport will be able to get straight down to work rather than spend endless hours undergoing in-house safety training courses. Passport training should also reduce the chance of accidents occurring in the workplace.

Guy Schrecker, the general manager at HSE Passport, pointed out that agency workers holding a recognised passport card confirming they are health and safety ready can accept placements straight away and there is no need for the employer to hold induction sessions. Health and safety passports are portable and can be taken from project to project. If recruitment agencies made a passport a mandatory requirement, clients would save valuable time and money.

Umbrella company contractors could find themselves having to undergo a HSE passport health and safety course in the coming months. While this might seem like something of a bind at the time, the long-term benefit is that they will be able to step into new contracts and commence work immediately.

David Cameron pledged recently to rid the UK of some of the pointless health and safety regulations that are blighting British businesses. In a lot of cases, health and safety is common sense and workers should be able to take responsibility for their actions. But, if holding an HSE Passport speeds up the process of getting into work, it has to be worth considering.

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Rathlin Energy will spend five weeks this year drilling to a depth of about one and a half miles in certain areas between Bishop Burton and Walkington; two villages to the west of Beverley.

Although some local residents objected to the plan, oil companies said it was important to establish whether the area contained any resources and they will be working around the clock throughout the five-week period to ensure they search as much of the region as possible.

David Montagu-Smith, the chairperson of Rathlin Energy UK, said these types of exploration ventures are an essential first stage if we are to discover whether we have natural resources hidden beneath our feet.

Because the drilling is just scheduled to run for a short time, Rathlin Energy is unlikely to hire full time staff and this could open up opportunities for freelancers and umbrella company contractors.

The oil and gas sector is a growing industry in the UK. Last year, about £7.5 billion was invested into oil and gas, and as with any growth industry, there are plenty of good opportunities on offer for talented, experienced contractors.

In addition to the Rathlin project, it is believed that a further £2 billion will be invested in searching for oil in the West of Shetland. Again this project is likely to create short-term positions for contractors this year.

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Freelancers in the public sector have had a roller coaster year so far and they will probably be relieved to learn that demand for IT contractors in the sector rose sharply in September.

Computer People recently released its latest figures showing that roles for IT contractors in the public sector increased by 4.3% in September; a reflection that critical projects are still going ahead despite the spending cuts.

The agency commented that although times are hard in the public sector, managers are more likely to use contractors because they can attribute the costs to project budgets, rather than fixed costs.

Sid Barnes, one of Computer People’s directors, said the permanent market has fared worse than the contract one over the past half-year and this could mean contractors are getting the work that would normally have gone to permanent employees.

An increasing number of public sector projects were re-instated and new ones approved. Hiring managers also received new budgets and were keen to snap up quality contractors. The demand for C #, .Net and Oracle contractors has been steadily increasing and although database developers saw rates decrease slightly in September, it is thought there is still money in the pot.

The agency also believes demand for IT contractors will increase further in the first quarter of next year as managers try to spend any left over budget before the year-end.

However, what will that mean when it comes to the second quarter? Barnes believes that spending will reflect both budget levels and managers’ confidence levels in the IT community as a whole.

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A new survey by international office space supplier, Regus, suggests that the UK’s SMEs are turning to contractors to help them through the uncertain economic times.

49% of SMEs that trade internationally say they intend to hire freelancers and 39% plan to hire people who will work remotely.

The research also discovered that overall business confidence has dropped by 20% since April. However, SMEs that trade overseas displayed 88% business confidence, compared to domestic firms who are only 79% confident.

Celia Donne, the regional director of Regus, said SMEs know they have to continue their investment in growth, and are turning to freelancers and remote workers as a way to boost their headcounts. 27% of employed people in the UK are now classed as flexible workers, demonstrating that the employment market has undergone a significant shift in recent years.

Another survey, this time from Simply Business, found that 27% of small firms intend to increase their headcount over the coming 12 months. Whilst this sounds like good news, the downside is that nearly three-quarters of SMEs are not intending to hire new staff next year, and in fact they could be planning to make redundancies.

Burdensome bureaucracy is putting a lot of companies off taking on new employees and government incentives have done little to encourage them. The National Insurance Holiday scheme fell flat and although the Chancellor has come up with measures to help young people into work, only time will tell whether they will be successful.

In the run up to Christmas, hiring will slow down as many companies look forward to the festive break. Hopefully, things will start to pick up again in the New Year.

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It has been suggested that the implementation of the Agency Workers Regulations will make it harder for umbrella company contractors to secure a mortgage.

Mortgage lenders have always viewed the employment status of contractors with risky eyes. Contractors and freelancers have struggled to persuade banks and building societies that they receive payment from a third party, especially when expenses and payroll fees feature on their payslip.

Furthermore, lenders say that AWR has made their lending decisions even more complicated because payslips do not show what an individual really earns.

Some lenders will grant a contractor mortgage on the value of a gross annualised contract, but in order to qualify the contractor needs to be named on his or her contract. And this is where the problem lies.

Since the introduction of AWR, a lot of umbrella companies have firmed-up on their contractor’s employment status. Increasingly, contracts do not mention the name of a contractor, meaning they cannot avail of specialist mortgages based on contract rate. The payslips that they do receive also mention various headings and deductions that make mortgage companies wary.

Despite these seemingly insurmountable obstacles, umbrella company contractors should not be tempted to tell lies on their mortgage application forms. They must come clean about their employment status and if they are working on a short-term contract, the lender must be informed, Failure to do so could see them charged with mortgage fraud.

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Those of us looking for work might be interested to read the results of the latest Outlook Survey from Manpower. The survey asks employers about their hiring intentions for the coming quarter.

Overall, Manpower found that employers are still positive, although less than they were previously. The Index recorded a balance of +2% companies intending to recruit employees in Q4. However, this is a decrease from the previous quarter when hiring intentions registered +3%, and it’s the first overall decrease since the beginning of 2009.

The North-South divide has reappeared and prospects in several areas of the North do not look good. The mythical line runs from the Humber to the Bristol Channel and employers to the North of it predict -2% hiring, whilst below the line, the figure was +6%.

Earlier this year, employers in the finance and business services sector were hiring like nobody’s business, but their Q4 predictions were down four percentage points to +6%.

Mark Cahill, the UK MD of Manpower, said the finance sector had been the most optimistic sector after the recession but this optimism has been dropping away recently.

The utility sector has now taken over as the most positive sector. Employers in the electricity, gas and water industries report hiring intentions of +10%.

On a regional basis, the East of England is most optimistic at +11%, followed by the East Midlands and the South West at +8% and +7% respectively. At the other end of the scale, hiring intentions in Northern England fell to -10% and in Wales to -6%. Unusually, London came in at a flat 0%, but that could be due to the lack of optimism in the financial sector.

Of course, there could still be plenty of opportunities for contractors, especially in the North. Employers may not want to hire permanent staff, but if they have a rush job to complete, they could well turn to freelancers and contractors to plug the gap.

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Contractors may be interested to learn that the UK hires more online freelancers than any other European country.

Elance, the online freelance jobs market, recently released survey findings that showed that the UK hires the greatest number of online freelancers, followed by Germany, Switzerland and the Netherlands.

Fabio Rosati, the CEO of Elance, said the UK is leading the trend for online workers. Businesses appreciate the flexibility of a freelance workforce and contractors are snapping up online working opportunities now that traditional employment routes are stagnating.

He went on to explain that this trend could be seen across Elance’s platform as companies turn to freelancers and contractors to finish projects and fill skills gaps.

Maybe not surprisingly, companies in London hire the most contractors from the Elance site. However, in recent months, there has been an 89% growth in online hiring from firms in Birmingham and 59% from companies based in Reading.

Meanwhile, the REC will be extolling the virtues of the flexible working market when it participates in the European Employment forum later this month.

Tom Hadley will chair the meeting and will focus on the role recruiters in the private sector can play in national labour markets.

Hadley said he was delighted to be invited to such a high-profile event and says it shows recognition for the role the UK recruitment industry is playing in promoting flexible labour and helping to tackle youth unemployment.

In addition to the opportunity to highlight the REC’s Youth Employment Charter, the Forum in Brussels will provide a great chance to exchange views with other European employment experts, he added.

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Suitably qualified IT contractors might benefit from the lack of applicants for mid-level permanent vacancies in the UK’s IT departments.

Despite an increase in the number of full-time IT roles on offer, recruiter IntaPeople says applications in the 3^rd quarter of this year are down 22% on the comparable period in 2010. In Q3 last year, IntaPeople had a pool of 2,874 people chasing a permanent role in IT; now it says it has 2,511 candidates.

One of IntaPeople’s directors, Stephen Riley, said some firms now have to put projects on hold because they can’t find the people they need. There is a lot of top-level talent, but workers in the mid-tier are usually the ones that turn strategy into action.

Riley wants to see the government do more to make sure youngsters understand the benefits of learning IT at school, but says that there is a void that currently needs filling and freelancers are well placed to step in.

He went on to explain that an increasing number of companies are looking to freelancers; especially those based outside major cities.

Meanwhile, ITJobsWatch has reported that daily rates for some IT contractors are decreasing.

The average rate for a developer is down £25 year-on-year to £375. 10% of developers are still getting more than £600 a day, but the same percentage gets less than £250.

Project managers and business analysts receive an average £450 a day, but the top 10% command an impressive daily rate of more than £650.

ITJobsWatch also reports that there is a bigger range in rates than was previously seen. And even though some banks have cut rates by 10%, there are still good rates to be had.

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According to jobadswatch.co.uk, the third quarter of 2011 saw an increase in the number of opportunities for IT umbrella company contractors.

The website’s data shows a 4.7% increase in the number of adverts for freelancers on the main IT and multi-sector UK recruitment sites in Q3. The number of adverts for full-time IT staff also increased, but only by 1%. However, these figures show that IT recruitment has been expanding for the last nine consecutive quarters.

Jobsadwatch expects this upturn will continue, as employers frequently turn to contractors in the first instance when hiring conditions improve.

However, there are regional disparities and IT contractors in the North West actually saw a 13% decrease in the number of job adverts in the third quarter, whilst Inner London registered the most new contracts.

Adverts for contractors with AGILE skills were up by 38%, followed by .Net with a 23% increase. AGILE is very much the new kid in town, but is rapidly gaining in popularity. There has been a 75% increase in demand for permanent staff with this particular IT skill over the past year.

None of the IT skills registered a fall in demand, but candidates hoping to secure a public sector IT contract saw a 40% drop in adverts.

Financial services firms are now looking for more IT contractors than they were this time last year, as are software houses.

The Monster Employment Index also registered a 19% increase in IT recruitment over the past 12 months. Despite this, the IT sector dropped to fifth place in the monster overall rankings. Engineering topped the chart, transport and logistics came in second and maintenance and construction occupied the third and fourth places.

Monster’s Employment Index also showed that in September, six out of the nine regions in the UK saw an annual increase in online job vacancies. Best of all was the South West where opportunities increased by 22%.

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Employers are increasingly turning to the flexible workforce, including freelancers, to help them survive during the current turbulent economic climate.

The REC recently published a paper entitled “Talent Acquisition in Turbulent Times” which highlights a change away from the traditional model of managing talent in favour of a model based around Talent on Demand. This allows companies to align their talent requirements with their dynamic business objectives and move away from a fixed base of resources to a more flexible one.

External recruiters have a vital role to play in this new model, providing companies with unique access to a pool of candidates with rare skills.

Roger Tweedy, the director of research at the REC, said the emerging open model challenges the existing internal recruitment solutions that are becoming bogged down by the pressures of time and cost.

HR departments face some serious issues as global talent shortages get worse and companies need to alter their approach to acquiring talent. Employers face major challenges if they want to secure the best candidates and gain competitive advantage, Tweedy continued. As well as addressing rapidly changing technology and a lack of suitably qualified people within their organisation, they will also have to consider a new breed of candidate and new ways of working.

We need to identify new robust recruitment models that can withstand the challenges of the future. Leading recruitment agencies are already developing new ways to match both active and passive candidates with employers and these new tools enable recruiters to provide better value for their clients and build up vital strategic relationships.

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