Scottish contractor demand improves again

Tuesday 18 June 2013

Contractors and other self-employed professionals in Scotland are enjoying even greater demand, according to the Bank of Scotland Report on Jobs.

The research showed that the number of appointments made in May rose sharply both for permanent and temporary workers, indicating that contractors are grasping the opportunities afforded by the Scottish labour market.

Across the country temp billings rose strongly, reporting the highest increase since January. In comparison, permanent placements grew at a solid rate, but could not match April’s figures which demonstrated the highest rate of improvement in a year. The number of vacancies was also encouraging throughout Scotland - demand for contractors rose strongly over the course of the month, albeit at a slower rate than in April. At the same time, permanent vacancies registered the biggest rise for four months, suggesting that business confidence is improving north of the border.

Pay packets also improved considerably, with hourly rates for contractors and other temporary workers rising for the third month in a row and at the quickest pace so far this year. Meanwhile, permanent staff enjoyed the highest rate of salary inflation since May 2008, indicating that if companies can find candidates with the skills that they need, they are still willing to pay for the privilege.

Availability continues to be a problem which plays into the hands of contractors. The fifteenth drop in a row for permanent availability was met by a slight drop in the availability of contractors, meaning that those who are looking for their next contract are likely to find themselves in even greater demand.

Dundee appears to be a hotspot for contractors and other temporary staff, since recruitment agencies there reported the biggest increase in billings across the country. It was also the place where availability declined the most, suggesting that contractors in the area will be able to take their pick of a wide selection of opportunities which demand their specialist skills. When it came to remuneration, Glasgow was the place to be for contractors as it demonstrated the fastest rise in hourly pay.

In contrast, Aberdeen posted the strongest rise in permanent placements and permanent salaries - possibly as a result of renewed growth in the oil and gas sector as record investment begins to have an impact. Edinburgh saw the biggest decline in availability for permanent workers, which could in turn lead to a rising demand for contractors and other freelance workers to plug the skills and knowledge gaps in many large organisations.

When it came to specific sectors, it was IT and engineering contractors in the greatest demand. Although medical staff were the flexible workers in the greatest demand, IT and engineering took second and third place respectively. The fact that they were the two sectors posting the largest numbers of permanent vacancies too suggests that the skills gaps dogging these fast-growing industries show no sign of going away.

“These results provide further evidence that business confidence is slowly being restored,” said Donald McRae, chief economist at the Bank of Scotland, “enabling the Scottish economy to record much sought-after growth during 2013.”

By Victoria McDonnell

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