The COVID Shock and Impact on Contract Employments

It is no surprise COVID has impacted so many industries around us. Today’s question is around its impact on the recruitment industry. In particular, my focus would be on contract/fixed term employments.

For many organizations, including startups the contract roles work very well. In my previous startup experience – we used these contracts to perform a specific area of work. We knew that this work was one time only and future dependencies were less.

Of course, they were far more expensive compared to full time employment. However, if you consider employment costs, taxes, national insurance contribution – the odds are evenly stacked up.

The Impact of COVID on contract employments

One of the foremost response to COVID has been that companies have started looking inward to focus on cost reduction. This has meant redundancies in some organizations. Many companies have cancelled renewal of fixed term contracts and employments.

This has naturally led the contract employment industry into a shock. The impact has been very high from a contractor’s perspective as the immediate future looks bleak. The market is showing signs of plunging into a recession.

What seemed like a profitable venture now suddenly appears to have been completely disrupted.

Fixed Term/Contract Employments

I came across an interesting ted talk yesterday about managing work force amidst covid. The talk was centered around consultant workers as opposed to full time employees. It talks about providing security to consultant/specialist workers outside of an organization.

We know that many organizations have laid off contract roles and fixed term contracts as a response to pressures of reducing costs. I do agree in principle to the content in this talk. However, putting on a business leader’s hat – I do question how easy it would be to implement providing these protections.

The current scenario has certainly put the business world into a wide array of questions. The question about impact of covid on contract employments is still very concerning. Tax breaks on self employments, loan schemes have come in handy, but the contract employment market is still in a very concerned state.

What does the future look like?

This I believe is a question which most researchers are finding hard to unveil. From an economic perspective, this is certainly leading to a recession and god forbid an impending depression.

If that seeks in, I personally feel that the impact of covid on contract employments market is devastating. With organizations looking to cut costs, there doesn’t seem to be a sizeable break.

However, on an optimistic note – it is an opportunity to reinvent the contract employments market. It would be interesting to see what this disruption looks like. In essence, the markets need to recover and we need to pave way to the economic resurgence of the contract employment market