Contractor recruiters continue to struggle to source sufficient candidates, while a significant slowdown in terms of contractor demand growth points towards suggestions that cross-sector skills shortages are beginning to slow projects down.
This is according to the Recruitment and Employment Confederation (REC) and KPMG Report on Jobs for August 2015, which highlighted that while contractor agency billings rose during August, it was at the slowest pace seen since May 2013.
Both skills shortages and time spent away from the jobs market by contractors during the summer holidays are thought to have contributed to this as contractor availability numbers are also down, with August marking the most severe drop in availability in ten months.
“There was no respite for recruiters in August, who were left struggling to fill vacancies after a vast swathe of Britain’s job seekers appeared to take the summer off. The number of people looking for a job fell at the sharpest rate seen for a year, leaving unfilled posts across the economy,” notes Bernard Brown, Partner at KPMG.
Whilst demand for permanent staff continued to rise at a significant rate, the report highlights that contractor demand recorded its slowest rate of growth in 26 months.
REC chief executive Kevin Green believes the current trends point towards an economy not living up to its full potential: “The UK jobs market is entering a new phase. Because of the scarcity of talent available, we expect that employment will continue to grow but at a slower speed than we have seen over the past two years. Likewise, unemployment is likely to slow its rate of descent as we move closer to full employment.”
After rocketing to first place in the contractor demand league last month, construction has slumped down to eighth. This is thought to be down to a period of expansion and a new wave of optimism in the sector - highlighted by the Markit/CIPS UK Construction PMI - causing many employers to look towards permanent staff instead.
Engineering also fared poorly in seventh spot, which is thought to be largely due to the uncertainty over business resulting from falling oil prices. There is better news for the accounting/financial sector which has jumped up to third place, while IT & computing sits in sixth.
Meanwhile, contractor pay rates continued to rise, albeit at the slowest pace in 16 months. The North of England enjoyed the fastest rise in contractor rate, while the weakest increase was seen in London.