ATA Recruitment

​Navigating Uncertainty: How Contract Recruitment Supports Engineering and Manufacturing Businesses

​

The 2025 increase in employer National Insurance Contributions (NICs) has created a new layer of financial complexity for UK employers, especially in sectors like engineering and manufacturing, where skilled labour is critical and payroll forms a large part of operational costs.

The Financial Pressure of Higher Employer NICs

​

With the employer NIC rate rising from 13.8% to 15% and the threshold reduced from £9,100 to £5,000, companies face significantly higher costs for permanent hires. For example, employing an Engineer earning the average UK salary of £36,036 now costs businesses an additional £940 per year in NICs, up from £3,715 to £4,655.

This sharp increase in employment costs is pushing many businesses to re-evaluate their workforce strategy. Some are slowing down recruitment or even reducing headcount to maintain profitability in an increasingly competitive market.

While the Employment Allowance has increased from £5,000 to £10,500, this may offer only limited relief, particularly for larger engineering and manufacturing firms with significant staffing requirements.

Contract Recruitment: A Strategic Workforce Solution

​

In response to these changes, contract recruitment has become an increasingly valuable strategy for businesses looking to manage labour costs without sacrificing productivity or project delivery.

Key Benefits of Contract Recruitment for Engineering and Manufacturing

Scalable Workforce Solutions

Scale your workforce up or down based on project needs, without the long-term financial commitment of permanent employees.

Access to Specialist Skills

Engage expert contractors for niche roles or time-bound projects, ensuring high-quality work without the overhead of a full-time hire.

Reduced Employment Costs

Avoid additional expenses tied to permanent staff, such as benefits, pensions, training, and NIC obligations.

This flexible approach helps companies stay agile, maintain project continuity, and manage risk during economic uncertainty.

How to Implement Contract Recruitment Effectively

​

To unlock the full benefits of a contract workforce in engineering and manufacturing, businesses should:

1. Partner with a Specialist Recruitment Agency

Work with a firm that understands your industry and has access to a pre-vetted pool of engineering and manufacturing contractors.

2. Align Workforce Planning with Project Goals

Assess your project pipeline and identify where short-term expertise or extra capacity is needed.

3. Stay Compliant with Employment Regulations

Ensure contracts, IR35 status, and all legal obligations are properly managed to avoid potential pitfalls.

Need Help with Contract Recruitment?

At ATA Recruitment, we’re committed to addressing the skills shortage in engineering and manufacturing. Contract recruitment is just one of the many tailored solutions we offer to help bridge that gap, offering access to a wide network of qualified professionals ready to hit the ground running.

Learn more on our Contract Recruitment Services page to discover how we can support your workforce planning.