How IR35 Is Shaping Contractor Availability
Why contractor engagement now starts with trust, not just terms.
IR35 is no longer just a compliance box to tick — it’s a defining factor in how engineering and technology businesses attract and retain specialist contractors. And right now? The ripple effects are being felt across every sector that relies on flexible expertise.
Contractors are rethinking their options. Opportunities feel fewer, the terms less favourable, and many high-skilled professionals are walking away — or looking overseas.
That doesn’t mean the model is broken. But it does mean the relationship between employers and contractors needs a reset.
So, what’s really happening?
STEM professionals are increasingly wary of contracting in the UK. The appeal of flexible work — high earning potential, project variety, the ability to step in where it counts — is still strong. But shifting tax rules and added risk have made many cautious.
Fewer are willing to engage on Inside IR35 roles. Some won’t apply at all. And the senior, highly skilled contractors businesses value most are often the first to step back when terms feel unclear or unfair.
Since the introduction of the Off-Payroll Working reforms, many employers have adopted a more risk-averse approach — avoiding outside-IR35 engagements altogether or defaulting to umbrella models.
While this may offer short-term compliance security, it's led to a reduction in both the quality and quantity of available contract talent. Experienced professionals, particularly those in IT, engineering tech, and project management, are walking away from roles that lack clarity, flexibility, or fair reward — creating a quieter, more competitive contractor market than we’ve seen in years.
But it’s not all bad news
Plenty of professionals still want to contract — and many would do more of it if the conditions were right. Contractors haven’t disappeared — but many are now more selective. Only 41% of STEM professionals open to contracting say they’ll consider all roles, regardless of IR35 status.
What they’re looking for now is clarity, fairness, and a sense that employers are treating them as partners, not paperwork.
This is where forward-thinking businesses have the edge.
When you’re transparent about IR35 from the start — when you show you understand the risks contractors take on, and work with them to create fair, balanced arrangements — it builds trust. And trust attracts talent.
What we’re seeing isn’t just contractor hesitancy — it’s a shift in power. STEM professionals are increasingly selective, and rightly so. They’re choosing clients who offer not just competitive day rates, but consistency, communication, and commitment. That means organisations that treat IR35 as part of a wider talent strategy — not a last-minute legal hurdle — will be first in line to secure the expertise others miss out on.
What can employers do?
- Plan early. Build IR35 assessments into your project design phase, not the final days before onboarding.
- Be clear. Don’t leave contractors guessing on role status, terms, or scope.
- Think long-term. The best contractors work with the clients who treat them with respect — not just the highest bidder.
- Stay vocal. The market is watching. If you’re engaging contractors responsibly, say so. It’s a differentiator.
IR35 isn’t going anywhere. But that doesn’t mean contractor availability has to dry up.
The businesses that come out ahead will be the ones who get what’s really going on — and adjust not just their policies, but their mindset.
After all, if you want the best people in your corner, the contract is only the start.