Contractors continue to enjoy high levels of demand and contract rates. The evidence suggests that, with demand for contractors in some sectors far outstripping supply, now is also a good time to consider transitioning into contracting from permanent employment. This is further bolstered by research by the Recruitment and Employment Confederation that shows 41% of workers would like to try contracting and freelancing, and that flexible working is now a mainstream element of the UK labour market.
In this month’s ContractorCalculator Market Report:
- The Recruitment and Employment Confederation (REC)/KPMG Report on Jobs for June shows the core contracting sectors topping the demand league table
- Scotland’s contract market is especially buoyant, highlights the latest Bank of Scotland Report on Jobs
- A new report by the Recruitment and Employment Confederation (REC) confirms that contracting and freelancing have become a mainstream element of the UK labour market
- Now might be a good time for employees to consider making the transition into contracting, as the latest Recruitment and Employment Confederation (REC) JobsOutlook confirms demand for skilled contractors is outstripping supply
- Demand for interim management contractors increased by 15% during the first quarter of 2014, reports the Interim Management Association’s (IMA) latest Ipsos MORI survey.
Core contracting disciplines top demand league tables during June
The core contracting disciplines of engineering, construction and IT were all in the top five of the demand league table during June 2014, in first, third and fifth places respectively.
The Recruitment and Employment Confederation (REC)/KPMG Report on Jobs for June also shows accounting and financial contractors in sixth place and interims – ‘executive/professional’ – were in last/ninth place, although still well into growth territory.
Although the high demand for contractors is positive in the short-term, skills shortages could cause more fundamental economic problems. REC director of policy Tom Hadley explains: “This month sees the number of workers available to fill vacancies plummet to an all-time low, in particular across business development and sales roles that are vital to boosting bottom lines.
“There are also persistent shortages across IT and engineering, which are becoming a serious threat to economic growth.”
“Contractors are the powerhouse that is fuelling the UK’s economic recovery,” adds ContractorCalculator CEO Dave Chaplin. “When the country needs to build infrastructure and become more efficient, it is contractors who make those projects happen.”
Scotland’s contracting market reaches an 11½ year high: rates and contracts up
Contractors are experiencing a buoyant contract market in Scotland, as the number of available contracts and pay rates rose strongly. This is according to the Bank of Scotland Report on Jobs for June 2014, which also shows that “temp pay rose solidly on the month, and at a slightly faster rate than in the preceding survey period”.
“It’s really encouraging to see not only that June’s Barometer for Scotland has hit a record high, but also that there has been a similar upturn in the UK as a whole,” says ContractorCalculator CEO Dave Chaplin. “While the headline figures might cause employers to be concerned about the longer-term sustainability of the market, contractors can for now enjoy the luxury of being in a sellers’ market.”
Bank of Scotland chief economist Donald MacRae is equally optimistic about the performance of Scotland’s labour market. He notes that the June figures show an accelerated increase in placements, as demand for staff and contractors surges, leading him to conclude: “The recovery in the Scottish economy looks set to continue.”
Contracting is now mainstream, with a fifth of workers choosing flexible work
Contracting has become a mainstream way of working in the UK, as one in five workers has been a contractor or freelancer and 41% would like to give it a go.
A new report by the Recruitment and Employment Confederation (REC), Flex Appeal: why freelancers, contractors and agency workers choose to work this way, shows the contracting bug is spreading, and not because people are forced into temporary work when trying to find permanent employment.
Working as a contractor, freelancer or agency worker is a choice for many people, and flexibility is a key reason they opt for this kind of work
Kevin Green, REC
REC chief executive Kevin Green explains: “Working as a contractor, freelancer or agency worker is a choice for many people, and flexibility is a key reason they opt for this kind of work.”
ContractorCalculator CEO Dave Chaplin, himself a former IT contractor, agrees: “REC’s findings confirm what serious contracting and employment commentators have been asserting for many years, that contracting is a legitimate career choice and one that plays a huge part in supporting UK Plc.”
Contractor skills shortages rising: is now a good time to move into contracting?
Contractor skills shortages are rising, with 34% of clients reporting that they cannot find enough suitably qualified contractors to fill their technical and engineering roles. In addition, a quarter of clients predict that this is unlikely to change over the medium term.
Now might be a good time for workers in permanent roles to consider making the transition into contracting, as demand continues to outstrip supply in engineering, construction and technology.
This is further supported by data from the latest REC JobsOutlook. It highlights that 47% of clients plan to increase contractor hiring over the next quarter, and 42% predict that they will need more contractors in 4-12 months.
REC chief executive Kevin Green emphasises the challenges facing clients, but which will benefit contractors: “Employers are going to have to work harder to attract candidates as the labour market booms and competition for talent hots up.
“Skilled individuals are scarce in technology, engineering, construction and HGV driving, and companies are already increasing pay to encourage people to jump ship and join their workforce.”
Interim management contractor demand grows by 15% during first quarter
Demand for interim management contractors grew by 15% during the first quarter of 2014, when compared to the last quarter of 2013. And the Interim Management Association’s (IMA) latest Ipsos MORI survey reports that numbers of enquiries by clients for interims’ services increased by 18% over the same period. That’s the fastest growth since the survey began in 2006.
The data also shows that the gap between the private and public sectors is narrowing, as interim use by private sector clients fell by 14% to 54% overall and public sector client interim use has grown by to 44%, from 30% in the previous quarter.
“These are positive trends, and reflect the sentiment of IMA providers,” explains IMA chairman and director at Penna Plc Simon Drake. “The sector has experienced a real boost to business during the first half of this year, when compared with the end of last year.”
The financial services sector continues to dominate interim management contractor use. 45% of all private sector assignments are within the financial services industry, a fall of only 1% from the previous quarter.