Contractors are used by 79% of contractor clients to provide short-term access to key strategic skills. This suggests that contractors who invest in training and development to maintain their skills base are most likely to stay in well paid contracts.
The Recruitment and Employment Confederation’s (REC) JobsOutlook for August 2015 also highlights that clients need contractors to provide these strategic skills as a result of skills shortages within their own organisations and in the wider permanent labour market.
REC chief executive Kevin Green explains: ““Our data tells us that the vast majority of the businesses we surveyed are operating at close to full capacity. However a continued lack of workers with the appropriate skills means that temporary staff are increasingly needed to fill areas of skills shortage.
“With capacity tight and employers already aware of candidate shortages, it’s clear that competition for top talent will be stiff. The private sector is clearly paying more to retain talent so the outlook for public sector organisations whose staff have the skills that the private sector requires is going to be testing.”
The skills shortages arising in the core contracting disciplines include construction, technical, managerial/professional and office workers. There are similar skills shortages in the permanent labour market, highlighting quite how serious the lack of available candidates in some disciplines has become.
It is larger clients that are investing the most in hiring contractors, says the report: “Whilst the hiring intentions of microbusinesses largely focus around engaging permanent staff, large employers continue to increase their intended focus on hiring agency workers.”
In contrast, microbusinesses are only a quarter as likely as a large employer to hire a contractor. In addition to improving skills, contractors clearly need to be targeting large employers as potential clients.
ContractorCalculator CEO is concerned that the skills shortages could start acting as a brake on the UK’s ongoing economic recovery: “The JobsOutlook shows that 95% of clients have no capacity for additional work at the same time as highlighting acute skills shortages in both the permanent and contract labour forces.
“My concern is that the shortage of skilled workers could impact negatively on the UK’s economy, particularly in the services sector that currently accounts for most economic growth.”