Higher pay for more vacancies for Scottish contractors

Tuesday 16 July 2013

Contractors in Scotland have seen a marked improvement in their prospects, as a new report shows the job market north of the border is recovering quickly.

According to the Bank of Scotland Report on Jobs compiled by Markit, the number of temporary vacancies shot up at the fastest rate for 21 months in June. Although rising demand for contract workers is often considered a sign that uncertain businesses are still not willing to commit to permanent hires, it appears that the labour market is improving for both categories. The number of permanent vacancies rose at the quickest pace since April 2012, suggesting that confidence is burgeoning in the Scottish economy.

However, as demand grows, businesses are recruiting from a narrower pool of candidates. Among permanent staff, availability declined more sharply than in any month so far this year. If that is likely to prompt businesses to take on contractors to fill the void, they will still not be spoilt for choice. The number of contract workers looking for an assignment fell for the second month in a row and at the most dramatic pace since October 2007.

This shortage has been exacerbated by an upward trend in employment in Scotland. Recruiters said that average billings from contract workers rose solidly last month, even if the rate had eased slightly from May, while the number of candidates placed in permanent roles improved at the quickest pace for 14 months.

Contractors and freelancers find themselves in a real sellers’ market - so perhaps it is no surprise that pay has risen too. Hourly rates for contractors rocketed at the quickest pace in nearly six years last month, and Scotland easily outstripped the rest of the UK. Wage inflation among permanent staff was the quickest since September 2007, indicating that demand for both categories of worker is only getting more pronounced.

“These results signal a further strengthening of the recovery in the Scottish economy and bode well for employment throughout 2013,” said Donald MacRae, chief economist at Bank of Scotland.

For contractors it appears that Dundee is a popular choice, since that city saw the quickest rise in billings for contractors. It was also the place where hourly rates for contractors showed the clearest signs of improvement. Among permanent staff, Aberdeen was the place to be for the second month running with the strongest performance on permanent placements, although Edinburgh demonstrated the most marked wage inflation.

But in Aberdeen contractor availability declined most noticeably, while Glasgow saw the biggest drop in availability of permanent workers. This suggests that demand for contract staff is likely to be strong there.

All eight employment sectors posted more permanent vacancies in June than in May, while seven out of eight offered more opportunities for temporary workers. Indeed, the sectors with strongest demand were some of those which traditionally host high numbers of contractors.

IT and computing had the highest number of permanent posts on offer, followed by engineering and construction. When it came to contractors, IT came in second place after medical and healthcare workers. Engineering was bumped down into fourth place behind the hotel and catering industry, but this was largely a result of the approaching peak tourism season.

By Victoria McDonnell

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