The size of the UK’s umbrella contractor workforce

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Quantifying the marketplace for temporary workforce management companies has proved a challenge in the past, largely due to the broad definition of what constitutes a contractor or freelance worker, and indeed how the worker defines their own role.

The Department for Business, Innovation & Skills (DBIS) uses a broad definition of temporary workers that includes all self-employed workers and limited companies without employees.

Based on these criteria, there are an estimated 4 million temporary workers in the UK.

Within this group, there are approximately 1.56 million contractors operating in the UK who are classed as being in a management or senior official role, a professional occupation or an associate professional and technical occupation.

The UK, which has by far the most mature temporary labour market in Europe, has the most even split between ‘blue collar’ and ‘white collar’ temporary workers in comparison to other European labour markets in which temporary or freelance working is common.

Based on these findings, it is estimated that 14% of the UK’s professional contractors are currently managing their business by working through an umbrella company.

According to the PCG, the 1.56 million contractors identified above contribute approximately £82bn to UK GDP across the manufacturing and service industry sectors of the economy.