Contractor prospects are reaching historic highs, with demand growth across all major contracting disciplines. Predicted skills shortages in sectors such as oil and gas, IT, engineering and construction are worsening, a sure sign that the economic recovery may be accelerating. However, market emphasis is shifting, particularly in IT, and contractors must remain on top of their learning and development to ensure they have the right skills to seize opportunities when they arise.
In this month’s ContractorCalculator market report:
- Contractor demand reaches a twelve-year high as growth accelerates across all core contracting disciplines, shows August’s Recruitment and Employment Confederation (REC)/KPMG Report on Jobs
- IT contractors should focus on acquiring specific digital skills to ensure they can fill future skills shortages, suggests a report by the UK Commission for Employment and Skills (UKCES) and IT sector skills council e-skills
- Oil and gas contractors will see a 15% hike in day rates during 2013 caused by skills shortages, and recruiter Oilandgaspeople.com believes that “this pressure on wages and skilled staff does not look likely to end any time soon”
- Interim management contractors experienced a record surge in industry growth during the second quarter of 2013, according to the latest Ipsos MORI data from the Interim Management Association (IMA)
- Research by The Hackett Group suggests that IT contractors need knowledge-centric skills if they are to survive an impending cull of 770,000 IT roles across Europe by 2017.
Contractor demand reaches 12-year high, and skills shortages loom
Contractor demand reached its highest level since December 2000 and agency billings grew at their strongest rate in over 15 years. Demand for contractors has grown for four consecutive months, alongside a sharp drop in contractor availability.
This is according to the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs for August 2013, which alongside a steep increase in rates, suggests that skills shortages may be on their way. “That’s good news for suitably qualified contractors, but less so for clients and UK Plc,” notes ContractorCalculator CEO Dave Chaplin.
The month saw growth across all major contracting disciplines, but engineering stole the show, shooting into first place in August’s demand league table from fourth place the previous month. Construction has slid into third place from second and IT and computing contractors have improved their position since July, moving up a place into fifth.
August was an extraordinary month for the UK jobs market, with temp placements growth hitting a 15-year high
Kevin Green, REC
“August was an extraordinary month for the UK jobs market, with temp placements growth hitting a 15-year high,” say REC chief executive Kevin Green. “The major issue now is the worrying lack of candidates to fill the jobs being advertised.”
IT contractors should be acquiring security, mobile, green and cloud expertise
IT contractors looking to stay ahead of their competition and ensure they are well positioned to maintain an ongoing stream of contracts should consider acquiring expertise in the security, mobile, green IT and cloud computing sectors.
According to a September 2013 report by the UK Commission for Employment and Skills (UKCES) and IT sector skills council e-skills, Technology and Skills in the digital Industries, those four sectors will underpin the £69bn contribution the digital sector makes to the UK economy.
The number of IT jobs and contracts has grown by 5.5% between 2009 and 2012, which is more than three times the rate of job creation in the wider economy. However, the report identifies that the digital sector suffers from an acute imbalance in supply and demand: “Skills shortage vacancies equate to 17% of all vacancies in the sector, and are experienced by over 3,000 employers,” it says.
The skills in greatest demand are in advanced IT and software, including security, systems integration, big data, risk management, sales, communications and sector-specific skills.
Oil and gas contractor rates set to increase by 15% during 2013
Oil and gas contractor day rates are predicted to surge by 15% during 2013, driven by skills shortages caused by decades of underinvestment into skills in the industry and the lure of high pay in other oil and gas provinces around the world.
The rate rises, forecast by recruiter Oilandgaspeople.com, are based on a survey of 2,200 energy majors, service companies and supply chain firms, and are causing deep concerns in the client community.
“Our survey shows that with increased investment in North Sea Oil, demand for qualified staff is set to reach an all-time high, which will exacerbate an already serious skills shortage,” warns Oilandgaspeople.com CEO Kevin Forbes.
Just over a third of respondents blamed long-term underinvestment into skills development, 37% suggested that many companies underestimated the impact technology has had on extracting hard-to-access reserves and 46% blame high pay offered by clients in other oil and gas producing regions around the world.
Interim management contractor market experiences record growth
Interim management contractors experienced record industry growth during the second quarter of 2013, according to the latest Ipsos MORI data from the Interim Management Association (IMA).
The number of new assignments increased by 8% compared to the previous quarter, and the average length of assignments grew to reach 181 days, a substantial increase on the 131 day average seen in the previous quarter.
“The findings … represent the highest overall growth rates we have seen since the Ipsos MORI survey was started and are really positive for the industry,” notes Jason Atkinson, chairman of the IMA and managing director at Russam Interim.
Despite a sharp increase during the first quarter of 2013, interim use in the public sector continues to decline, accounting for only 35% of all interim assignments. The financial services sector remains the overwhelming consumer of interim management contractor services, accounting for over half (56%) of all private sector contracts.
Contractors must gain new skills to avoid being one of Europe’s 770,000 IT casualties
IT contractors must adopt new skills strategies, focusing on knowledge-centric skills, if they are to avoid becoming one of 770,000 European IT roles predicted to disappear by 2017 as a result of offshoring and tech-driven productivity improvements.
In its latest research, IT analyst The Hackett Group says that the major factor driving the loss of so many contracts and jobs is the growth in global business services organisations and the shared service approach.
“The evolving offshore job market and the maturing of global business services operations has simply eliminated many of the jobs that used to exist in IT,” explains The Hackett Group’s managing director Rashpal Hullait.
However, Hullait believes that IT contractors gaining new skills will stay in contract: “Staff that can develop the knowledge-centric skills that companies need to support their shift to global business services, and their overall globalisation goals, will find themselves in great demand.”