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As we move further into 2023, it's becoming increasingly clear that the UK job market is experiencing significant changes. One of the most notable shifts has been a sharp decline in permanent hiring, with many companies now relying more heavily on temporary and contract workers to meet their staffing needs. According to recent headlines, permanent hiring is down by 20% compared to previous years, leading some to wonder whether this is a temporary blip or a fundamental shift in how companies are hiring people.

Despite the current economic uncertainty, there are reasons to believe that permanent hiring may not return to pre-pandemic levels any time soon. For one thing, companies have become more accustomed to remote working and virtual recruitment processes, which means they may not feel the need to have as many permanent staff members on site. Additionally, the rise of the gig economy and the increasing popularity of flexible working arrangements means that many workers themselves may prefer the freedom and variety of temporary or contract work.

This has opened the market to traditionally permanent role types now operating in a more contingent fashion. With many contract roles deemed inside of IR35 and the positions being PAYE/Umbrella, organisations are also becoming used to the flexibility of worker type and benefiting from less OpEx spend.

The challenge of knitting together a cohesive and committed permanent workforce in 2023 is becoming the same one whether the workers are permanently employed or hired on a more flexible basis. It is therefore essential that you have a plan for building a team with the best skills and like-minded goals, regardless of worker type.

So, what does this all mean for the future of hiring in the UK?

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Well, there's no doubt that the recruitment landscape is evolving rapidly, and companies will need to adapt in order to stay competitive. We are starting to see people strategies pivot to embrace longer term temporary and contract workers, as well as exploring alternative hiring models such as gig work and employed worker models. Companies that can be flexible and adaptable in their hiring practices will be best positioned to weather the current storm and thrive in the years to come.

While this shift towards temporary hiring can bring many benefits such as increased flexibility, cost savings and access to specialised talent, it can also create new challenges for businesses. Managing temporary staff can be time-consuming and complex, and companies may struggle to find the right talent quickly and efficiently.

One solution to these challenges is to partner with a Managed Service Provider (MSP). An MSP is a third-party provider that can help businesses manage their temporary staffing needs more effectively, by providing a range of services such as candidate sourcing, compliance management, mitigate risk and drive workforce planning.

How can companies navigate the shift towards temporary hiring?

Here are some key steps to consider:

 1. Develop a workforce planning strategy: To effectively manage temporary staffing, it's important to have a clear understanding of your company's needs and objectives. This includes identifying areas where temporary staff can be most beneficial and developing a plan for sourcing and managing talent.

2. Leverage technology: Technology can be a powerful tool for managing temporary staffing, by automating administrative tasks and streamlining the recruitment process. This can free up internal resources for more strategic tasks.

3. Create a talent pool: Many companies already have a pool of temporary staff, such as contractors and freelancers, that they can draw upon when needed. Engaging with this talent pool can be an effective way to manage temporary staffing, by building strong relationships and developing a talent pipeline.

4. Stay up-to-date with compliance: Managing compliance can be a challenge for businesses, especially when it comes to temporary staffing. It's important to stay up-to-date with the latest regulations and best practices, and to ensure that all temporary staff are properly vetted and trained.

By taking these steps, companies can effectively navigate the shift towards temporary hiring and manage their temporary staffing needs more effectively. Whether by partnering with a MSP or managing temporary staffing in-house, the key is to be agile and responsive to changing conditions in the job market.