Empowering the Freelance Economy

Warning: hiring managers are low balling contractors

Contractors must be prepared to counteract hiring managers lowballing their rates
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The UK’s freelance community is facing a potential slowdown in hiring opportunities in the last weeks of 2024 as businesses grapple with economic challenges and re-evaluate their growth strategies. This concerning trend was highlighted by CBI CEO Rain Newton-Smith in a recent speech at the CBI’s Annual Conference. However, when opportunities do arise, contractors must avoid getting lowballed, a trend that is surfacing.

Our survey showed half [of companies] are now looking to reduce headcount. And almost two-thirds are looking to cut their plans to hire.

CBI CEO Rain Newton-Smith

Hiring freeze

CBI’s Newton-Smith warned that rising costs, including National Insurance increases, are squeezing profit margins and forcing businesses to reconsider their hiring plans. “Our survey showed half are now looking to reduce headcount,” she stated, “And almost two-thirds are looking to cut their plans to hire.” This shift in business sentiment could have a direct impact on freelance recruitment, as companies may be less inclined to engage independent contractors for new projects or ongoing work.

The CBI CEO emphasised the urgent need for government action to stimulate growth and ease the pressure on businesses. She called for a reform of the business rates system, measures to encourage workforce participation, and greater flexibility in the apprenticeship levy.

Newton-Smith also stressed the importance of a strong industrial strategy that supports businesses of all sizes and fosters a competitive environment. She announced the launch of the CBI’s own “Blueprint for Competitiveness,” a guide for government and industry collaboration to drive economic growth and resilience.

The news underscores the importance for freelancers and the recruitment agencies that represent them to stay informed about economic developments and their potential impact on hiring trends. Freelancers may need to proactively adapt their strategies, including diversifying their skillsets, exploring new markets, and strengthening their client relationships, to navigate this challenging landscape. Recruitment agencies should actively engage with businesses to understand their evolving needs and position their freelance talent effectively.

Newton-Smith said, “Too many businesses are having to compromise on their plans for growth. We can’t let that stand. Tax rises have put pressure on business. So we must relieve some of that pressure.”

The CBI’s CEO thinks a solution to this challenge is to fix te UK’s “broken business rates system.”

“Right now, there are an estimated 9 million working-age people out of the labour force,” said Newton-Smith.

Continuing, she said, “Getting them back in and raising productivity are mission critical not only for growth, but for the wellbeing of our society. Business is essential for that – but the Budget just made it harder for firms to take a chance on people.”

The CBI’s survey showed half are now looking to reduce headcount with almost two-thirds looking to cut their plans to hire.

“The OBR says the National Insurance rises alone will reduce labour supply by 50,000,” said the CEO, adding, “If we made it easier for firms to provide occupational health at work, this could help 34,000 people stay in the workforce.

“The Budget also announced £40 million for the new Growth and Skills Levy. But what we need is immediate flexibility in the levy – so firms can use the funds for the training they need right now.”

Rates are going south and contractors lowballed

But, and this is a big BUT. No amount of pro-freelancer hiring in 2025 will make up for the fact that rates are going south and fast. When you do the math, some inside IR35 roles are coming in at below minimum wage when all the umbrella-related fees get lobbed onto the contractor.

There is another trend brewing that contractors must be aware of and avoid at all costs. And that’s being lowballed not based on your skills or experience but your position as a job seeker.

Max Dewar, an Oracle Recruitment Consultant, posted on LinkedIn a recent experience he had, starting with the question: When has it ever been okay to lowball contractors?

In his post, he wrote, “Recently had a contractor in a process (that I’ve known for years), stupidly I had said to the hiring manager that he was in no other processes as the markets a bit tough.”

He continued, “Contractor smashes the interview, hiring manager wants to offer him the contract. BUT… hiring manager decides to offer under the requested day rate as the contractor is “out of work” and is in “desperate need of a contract” When did we start paying people based on their employment situation and not on their experience/skillset???

Commentators on his post, said they have witnessed similar situations. One wrote, “We have near shore and offshore recruiters offering very low ball rates.”

Dewar posted that he saw the injustice in the hiring tactics and decided it was best to take the candidate out of the process: “I just put him into a contract that paid his worth!”

This trend is a warning for contractors working in any sector. It’s starting to look like you should keep your situation (and desperation) to yourself if you feel it will be taken as a bargaining chip against you. Any hiring manager who thinks lowballing a contractor is a smart move to cut costs is not calculating the risk of the skilled contractor jumping ship as soon as something more in tune with their historic rates comes around.

How can a contractor keep focused on their work if they are worried 24/7 about how they can afford to get to the office and pay their bills? They can’t and shouldn’t be in the position in the first place.


Have you experienced a similar situation? Are you impacted by this article? Share your thoughts in our comments section. While opinions are welcome, only professional responses will be published out of respect for our readers.

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7 Comments
  1. Carl says

    how do you stop being lowballed?

    1. Katherine Steiner-Dicks says

      Contractors can avoid being lowballed by being aware of the practice in the first place. If you are working through a recruiter make them aware that you want someone to represent you who has your best interests at heart and to NOT mention to a hiring manager or end client that you don’t have any other work in the pipeline or are desperate! If you or the person representing you highlights your skills and experience and the cost savings they will have in hiring you rather than hiring cheap and losing you half way through the project- then you will have a better chance not being lowballed. Offering different packages to align with your rate and their initial priorities is also another way to find a happy medium.

    2. steven young says

      Construction Recruiting agents use have removed the freelancers ability to self promotion in opportunities.
      Most agents operatives have limited knowledge of the construction process. They can read the words on a cv but cannot read the required experience and knowledge needed to attain that cv, these agents are leading the lowballing problem due to the pressure to fill work openings between recruitment companies and their profits. Leading to lowballing.
      The quality skill set, knowledge, and experience is dropping off a high cliff , this has to be recognised and stopped. Prime finishes should be the norm.
      A computer as yet has never laid a brick.
      The construction industry has to open its eyes before it’s too late lowballing for profit reduce quality. Which in turn wins contracts.

  2. Dave says

    What is low-balled? Can’t you write proper non-idiomatic plain English?

    1. Katherine Steiner-Dicks says

      Dave,

      The explanation and an example is in the article. Take it you didn’t read it?

  3. Rob says

    I have seen ridiculously low rates in the technology sector, and its either the clients taking the piss or the recruiters. Rates that should be £550/day outside are being offered £360/day via umbrella.

  4. Rob says

    There are large firms blanket banning PSC’s who in turn use smaller consultancy agencies who can bring in contractors however they want. The government have ruined the market and this is the fall out.

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