Falling candidate availability bodes well for contractors

Monday 9 December 2013

Contractors will find themselves in a strong position going into 2014, with falling candidate availability for temporary vacancies creating opportunities for freelancers.

The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs showed the number of candidates capable of filling permanent roles fell further in November. Indeed, the rate of decline was the fastest since July 2007.

With contractor availability also falling at the sharpest rate in nine years, work is certainly in abundance for freelancers.

The lack of workers is also driving up pay, with contract rates rising at a 'solid pace that was sharper than in October', according to the report. Permanent staff salaries have also risen further.

Bernard Brown, partner and head of business services at KPMG, states the current jobs market may be the result of continued fears over security or - most likely - the traditional winter slowdown.

"As a result employers are trying to tempt top talent to change jobs by offering more in the way of cash or incentives," he said.

"It’s a tactic that may bring short-term success, but the risk of falsely inflating the jobs market must be considered.  Left unchecked, it could put unnecessary and unsustainable pressure on businesses just at the time their cash flow problems are easing."

However, he acknowledged that conditions are certainly improving and the number of people placed in permanent and contract roles continued to rise upwards in November.

Although easing to a five-month low, growth remains strong and demand for staff increased at a faster pace in November - the sharpest since July 1998 in fact.

Most activity is taking place in the private sector, with permanent staff the most in demand. Conversely, the need for both permanent and short-term workers weakened in the public sector, with rates of expansion lessening.

All four monitored English regions did, however, continue to post increases in placements, with the fastest growth noted in the Midlands for both permanent and contract staff.

What's more, growth of demand was broad-based across all nine types of permanent staff. Engineering workers saw the greatest expansion, closely followed by nursing and medical care.

REC chief executive officer Kevin Green is confident these conditions will continue into next year.

"The fact that our figures show starting salary growth hitting a six year high, combined with continued skill and talent shortages, indicates that we can expect salaries to increase and job fluidity to accelerate into 2014," he said.

The wider economic recovery is also boding well and Mr Brown claims that businesses are becoming more and more confident.

"Organisations across the UK are maintaining their recruitment drive to the point that the rate of growth in vacancies has reached a 15-year high," he said.

Yet companies are still finding it difficult to lure permanent staff and with contractors seeing their workloads soar, businesses will be hoping conditions change slightly more in their favour in the New Year.

Opportunities are certainly out there at the moment, Mr Brown noted. While the Christmas period has seen workers more reluctant to seize them, once 2014 gets into full swing more people will no doubt be looking to enter the jobs market.

By Victoria McDonnell

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