Contractor demand looks set to be sustained for the foreseeable future as clients’ continued increased confidence in the market looks set to equate into an overall increase in temporary workforce headcounts.
This is according to the Recruitment and Employment Confederation’s (REC) JobsOutlook for October 2015, which reveals that more than three quarters of organisations consider domestic economic conditions to be improving. Subsequently, almost half of respondents (47%) expect confidence in hiring decisions to improve.
However, the continued increased demand for contractors amongst clients also comes with concerns that requirements may not be met by the contingent workforce in certain sectors.
“The demand for skilled people is especially acute in construction and engineering as a result of newly announced housebuilding and infrastructure projects,” highlights REC chief executive Kevin Green.
The recent housing boom means that construction contractors are expected to be back in significant demand, with 11% of respondents expecting a shortfall in sufficient candidates within this sector. Meanwhile, engineering took the top spot in this regard, with 16% anticipating a skills shortage amongst contractors in the industry.
“Employers are finding it extremely difficult to fill vacancies and need to find creative solutions to overcome staffing challenges,” notes Green. “In areas where permanent roles are particularly hard to fill, employers are turning to temporary workers in order to access key strategic skills.”
The value of contractors in providing short-term access to key strategic skills was again emphasised, with 79% of clients highlighting this factor as being of particular importance in their decision to utilise contractors. Meanwhile, contractor value in terms of aiding and supplementing company growth (59%) and the cost-efficient nature of their services (62%) were also highlighted.
Such factors look to have contributed towards continued demand for contingent staff extending into the New Year and further. Whilst the majority (94%) of clients either admitted to having no spare workforce capacity or felt that they would have to add resources, the latter looks rather likely for many companies, with indications that many clients are currently buoyant about their trading prospects.
This notion was reflected through statistics revealing that 38% of clients still expect to increase their contractor headcount throughout the remainder of 2015, while 59% expect to sustain their reliance on contractors. Notably, only 1% of clients expect to make cuts to their contingent staff.
Medium-term prospects look equally promising, with almost identical figures suggesting that contractors currently in the market can expect to be in demand for the foreseeable future.
Meanwhile, contractor pay rates remain strong in comparison to permanent salaries. 39% of clients reportedly pay contractors improved rates when compared with permanent staff, whilst 55% believe there to be a parity in this regard.
“Contractors have continued to give a good account of themselves, as evidenced by this month’s JobsOutlook, providing convenient and cost-effective access to the strategic skills that they are noted for,” highlights ContractorCalculator CEO Dave Chaplin.
“With the continued overall improvement in the economic climate, the contingent workforce can expect to find demand for their services remains strong for quite some time.”