Contractors working across most core disciplines are faced with terms such as ‘stabilised’ and ‘falling’, rather than ‘increased growth’ in this month’s crop of labour force statistics. The only exception appears to be the oil and gas sector, which is experiencing a huge demand for skilled people. Indeed, firms are fighting to employ workers rather than contract them in a desperate attempt to reduce poaching and increase retention. However, market commentators acknowledge that the summer is notoriously slow and the autumn may herald new contract opportunities.
In this month’s ContractorCalculator Market Report:
- Online demand for contractors across most disciplines stagnated or did not perform well in June, reports the Monster Employment Index
- The KPMG/Recruitment and Employment Confederation (REC) Report on Jobs shows strong demand for engineers, but an eighth successive month of falling billings
- A switch by oil and gas firms to employing staff as a retention strategy has not dampened demand for contractors in the UK, according to the Hays Oil & Gas Global Quarterly Report
- Offshore workers in the ‘mid-term’ category, aged 35-49, are most in demand in the North Sea, and demand is set to increase according to the Oil & Gas UK 2012 UKCS Workforce Demographics Report
- The Chartered Institute of Personnel and Development’s (CIPD) Labour Market Outlook Summer 2012 highlights that although three quarters of private sector firms use contractors, the Agency Workers Regulations (AWR) have changed hiring patterns.
Online demand for contractors in some core disciplines stabilises
Online demand for contractors in the core contracting disciplines of IT and engineering stabilised during July. In contrast, demand for contractors in the construction, banking/finance and marketing, media and PR sectors all saw a month-on-month decline in online vacancies: 6.6%, 5.9% and 4.8% respectively.
This is according to the Monster Employment Index, which fell by 3.5% in July 2012 compared to the previous month and showed a year-on-year fall of 3%. Demand for professionals and associate professionals, which includes most contractors, were both down by 3.7% in July.
Monster UK & Ireland’s managing director Julian Acquari blames the eurozone for the stagnant labour market. But he highlights that there are some hotspots, although not in major contracting sectors, and that the situation may improve in the autumn.
The eurozone debt crisis continues to affect companies' recruitment plans
Julian Acquari, Monster UK & Ireland
“The eurozone debt crisis continues to affect companies’ recruitment plans,” he explains, “although there are still positive signs for a few select sectors. However these pockets of growth are currently counter-balanced by declines in the banking, marketing and construction industries.”
Engineering and construction contractors experience “solid growth”
Contractor opportunities for engineering and construction contractors experienced “solid growth” in July, according to the latest KPMG/Recruitment and Employment Confederation (REC) Report on Jobs. This is in contrast to the Monster Employment Index, which showed demand for engineers flat and sharp falls in construction.
IT and computing slipped into fourth place in the demand tables, with top spot taken by nursing and medical care. Contractors in the accounting and financial sectors experienced sharp falls, down to eighth place – the lowest in all the sectors monitored.
Overall contractor and temp billings fell again for the eight successive month, albeit at a lower pace, whereas vacancies grew. This suggests another month of skills mismatches, with client demand partly unfulfilled because contractors with the rights skills are unavailable to fill assignments.
Bernard Brown, Partner and Head of Business Services at KPMG is non-committal about the implications of July’s data: “The rate at which employers are recruiting has decreased for the second consecutive month, and this suggests that there is still a high degree of uncertainty. The real story of recovery will probably only start to emerge in the autumn.”
Oil and gas sector skills shortages are driving firms to hire employees, not contractors
Skills shortages in the global oil and gas sector are leading firms throughout the industry to focus their hiring on employees, not contractors. The latest Hays Oil & Gas Global Quarterly Report for July-October 2012 reveals companies are adopting this strategy in an attempt to improve retention, as the poaching of skilled workers is becoming rife in some regional markets.
Despite this ‘anti-contractor’ hiring trend, demand for workers across all disciplines and of all types – flexible and the employed – appears to be strong. Increasing demand for oil and gas and high oil prices are fuelling underlying confidence that the buoyant market is here to stay.
In the UK, the highest number of applications for North Sea drilling licenses since licensing began in 1964 is driving an exploration boom, with the resulting demand for skilled geoscience and engineering contractors.
And because the UK is the support base for exploration and production activity throughout the world, supply chain demand for contractors also remains high.
Contractor skills gaps in the North Sea are focused on roles requiring mid-term experience
The contracting skills most in demand by North Sea operators and service companies are held by workers in the mid-term category, where workers are aged 35-49. This is according to the Oil & Gas UK 2012 UK Continental Shelf (UKCS) Workforce Demographics Report, which identifies the mid-term category as the most mobile of demographic groups and most likely to be contracting on an ‘ad-hoc’ basis because of their experience.
The report also highlights that engineering and managerial roles are the hardest to fill, and operators also have difficulty recruiting scientists. Forecast growth in the North Sea’s offshore working population also suggests that operational staff with technical skills, such as electrical, mechanical and rigger contractors, will prove difficult to hire in the future.
Perhaps unsurprisingly, Oil & Gas UK’s analysis demonstrates that there is a direct correlation between demand for offshore workers, including contractors, and the oil price. Although there is a time lag of about 12 months, as the oil prices rises, so do the number of offshore projects requiring workers, and vice versa.
Contractors supply their services to three quarters of private sector firms
Contractors supply their services to 74% of all private sector firms, rising to 78% of organisations when the public and third sectors are included. However, the Chartered Institute of Personnel and Development’s (CIPD) Labour Market Outlook Summer 2012 also shows that the Agency Workers Regulations (AWR) have impacted on clients’ use of contractors and temps.
A fifth of contractor clients report that they now hire flexible workers for periods of fewer than 12 weeks. That just falls short of the qualifying period for the most substantial rights granted by AWR, such as equal pay. This figure rises to 25% in the construction and hospitality and leisure industries.
Contractor and temp demand is higher in the manufacturing and production sector compared to the services sector. Only 72% of service sector firms use contractors and temps, compared to 86% of manufacturing clients.