Contractors in the construction and financial sectors may be called upon to fill skills gaps after UK companies reported a decline in anticipated permanent hires as a result of candidate shortages.
This is according to the Manpower Employment Outlook Survey for the fourth quarter 2015, which reports that hiring optimism has sunk to a three-year low.
Overall, UK employers reported modest hiring intentions, with 88% anticipating no change in terms of staffing. 7% of employers are reportedly planning on increasing their headcount while 3% are anticipating making cuts, resulting in a net increase of +4%.
When compared with the figures over the previous quarter and the previous year however, the overall figures decline by two and three percentage points respectively. Consequently, the resulting outlook is the weakest reported since the fourth quarter of 2012.
Although companies are reportedly anticipating overall staff growth across all nine sectors highlighted by the report, six of these nine report weaker hiring intentions than at the beginning of the third quarter.
Notably, core contracting disciplines construction and finance & business have fallen into this category. The two sectors recorded quarter-on-quarter declines of 4% and 2% respectively. The year-on-year figures reveal an even more significant drop for finance & business, which recorded its weakest outlook in three years, with anticipated hires falling by 6% since this time last year. However, optimism in the construction sector is up by 5% compared to last year.
“Any uncertainty in the permanent jobs market plays into the hands contractors,” highlights ContractorCalculator CEO Dave Chaplin. “Companies may be unsure about increasing headcounts right now, but they’ll always require specialist skills which contractors and freelancers can offer at low risk for the short term.
“These figures are particularly encouraging for contractors working in the construction sector. With hiring intentions failing to match up to the recent period of growth, contractors can expect for their skills to be in high demand in a sector that is already short on supply.”
The survey, which analysed responses from a sample of over 2,000 UK employers, concludes that companies are operating more caution over recruitment plans due to the impact of the National Living Wage policy, which will see six million people receive a 6% pay rise each year until 2020.
Consequently, it is supposed that the reduced hiring intentions in the permanent jobs market will see a proliferation of the contractor market, with more people expected to look to explore self-employment.
The knock-on effect of the National Living Wage policy could inadvertently plunge another sector into a skills shortage, where contractors could reap the benefits, as highlighted by ManpowerGroup Solutions UK Managing Director James Hick: “As recruitment wanes, there is a risk that increasingly few younger workers will enter the public sector. If this trend continues then the sector faces a future without the talent and skills that it needs to cope with the changing nature of work in an increasingly digital world.”