Contractor demand will increase over the next 12 months, including a short-term burst of hiring in the next quarter.
This is according to the latest Recruitment and Employment Confederation (REC) JobsOutlook for March 2014. It also highlights that rates increased sharply in the first quarter of 2014 and skills shortages in core contracting disciplines are worsening,
“We...know starting salaries for new joiners and hourly pay rates for temporary staff have increased sharply at the start of 2014,” notes REC chief executive Kevin Green.
“Another factor for employers will be the growing scarcity of skilled candidates. As that becomes more apparent in a range of sectors, from white collar IT and management roles to drivers and caterers, businesses will be keen to do what they can to hang on to the staff they have.”
Nearly half of contractor clients plan to increase their contractor headcount over the next four to 12 months. This is an increase on February’s forecasts, showing that contractor demand is strengthening.
According to the report, agencies are predicting a particular shortage of contractor candidates for “the front-line skills within the service sector and those [skills] required to build/rebuild organisations’ own infrastructure.”
In practical terms, this is translating into a shortage of IT contractors and interims at the professional/managerial level. “A number of key areas are showing short-term demand at a two-year high,” continues the report. “These include agency workers with...professional and technical skills.”
This suggests that many projects postponed due to the recession are restarting, and that organisations are increasing their capacity and capabilities to take advantage of the opportunities offered by economic recovery.
Project-based contractors are ideal to fulfil these types of projects, and offer a low-risk route to expanding capacity before the decision is taken to make permanent appointments.
The report concludes on a positive note: Overall demand for contractors “is now 200 percentage points above the January 2012 base – up 65 percentage points in the last month alone”.