Large companies to give 3-in-10 roles to contractors

Friday 16 August 2013

Three out of ten new roles in big businesses will be contract opportunities, according to new research.

In its latest Labour Market Outlook survey, the Chartered Institute of Personnel and Development (CIPD) found that 30 per cent of the new hires in businesses with 250 employees or more would temporary workers. In smaller firms, just over a quarter of new recruits are set to be engaged on a non-permanent basis, taking the average proportion of new contractor opportunities to 29 per cent overall.

These figures show relatively little change from the past few surveys, CIPD says, indicating that contractors are continuing to operate in a relatively stable and favourable climate.

Contractor recruitment is set to remain more common in the public sector, although the gap is fairly narrow. A total of 32 per cent of new hires in the public sector will be on a non-permanent basis, compared to 27 per cent in the private sector.

This is likely to stem from the continued pressure on public services to make cost savings and improve efficiency: just last week, as evidence of the need to cut costs, the government issued a new procurement strategy for the NHS which obliges hospitals to publish details of the price they pay for different goods and services. Whether this will affect the health service’s treatment of the high level of IT contractors it employs remains to be seen.

Contractor recruitment is expected to be greatest in the south, as 32 per cent of southern jobs compared to 24 per cent of northern roles are expected to be filled on a temporary basis.

Businesses often turn to contractors as a means of allowing them to meet their current demand while granting them the flexibility to adapt if the market declines. It appears that this is borne out by the research, too. Businesses that said they had experienced decline in the past two years were far more likely to employ independent workers on a temporary basis than those who said they had experienced growth.

Interestingly, it seems that contractors who usually work through recruitment consultancies to find their next assignment may find themselves having to branch out. CIPD found that as part of their cost reduction strategies, more than half of the firms studied were trying to minimise the amount they spent on recruitment firms. Simultaneously, they were using alternative means to promote vacancies - a quarter of companies are increasing their use of social media to advertise available roles.

Overall, the figures demonstrate a continuing upward trend which began late last year, CIPD says. This quarter’s overall employment balance, calculated as the difference between the percentage of employers looking to increase and reduce their headcounts, stands at +14 compared to +9 four months ago.

James Reid, UK and Ireland managing director of SuccessFactors, which compiled the research for CIPD, says that the figures indicate that the recruitment market in the UK is finally gaining momentum once again.

“It is encouraging to see that in this quarter’s report those employers who expect to increase staff levels over those who expect to decrease staff levels stands at +14, up from +9 in the previous quarter – a true indicator of recovery,” he says.

By Victoria McDonnell

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