Wider use of contractors could be here to stay post-recession, a report suggests.

Wednesday 6 March 2013

More opportunities for contract and flexible working are likely to be among the legacy of the current recession, according to a report from the Chartered Institute of Personnel and Development and Success factors.

Employment is expected to grow in the first quarter of 2013, according to the latest Jobs Market Outlook, which shows a net employment balance of +5 (the difference between the proportion of employers planning to increase and decrease their staffing levels). This is the fourth successive quarter with a positive balance, which the report authors say corresponds to official statistics over the same period.

Private sector data indicates the most optimistic outlook. Despite a slight drop from last quarter, the employment balance there stood at +16 per cent.

In comparison, the public sector saw a sharp decline to -29 from -17 three months ago, even though both are marked improvements on the trough it experienced throughout 2010 and 2011. In the wake of the chancellor’s last Autumn Statement, further heavy job losses are to be expected until at least the end of this parliament in 2015.

However, some industries have continued to see hiring intentions improve, with finance, insurance and property at the top of the list, closely followed by manufacturing and production.

The report also points out an increasing trend towards temporary contracts. Employers expected nearly three out of ten new starters to hold temporary contracts, with numbers slightly higher among firms reporting little or no recent growth. Only just over a fifth were predicted to be in the same position out of those employed growing firms.

Nevertheless, the stereotype of the temporary worker looking for a permanent job appears well and truly broken in this survey, where more than half of those on temporary contracts said that they had chosen this option.

Part-time workers also present some surprises, since the number looking to work more hours was just under a third, leaving a majority who are happy to continue with their current contracts.

Because the figures are based on a survey of recruiters, they cannot reflect the increasing numbers of self-employed workers in the UK. Data from the Office for National Statistics (ONS) does show that an extra 25,000 people chose to work for themselves in the last quarter of 2012, bring the total to around 4.22 million.

ONS indicated that the self-employed chose to make the most of the flexibility that operating as a sole trader could offer them, with a much broader distribution of hours being worked than among employees, who tended to stick much more closely to the 40-hour working week.

In addition, women and older workers were more likely to keep less conventional hours than men, suggesting that the ability to fit work in around changing lifestyles continues to be an attraction.

Even though the job market leaves much to be desired for many workers, there appears to be a real appetite within the economy for flexible working, to which employers are beginning to adapt.

Some employers are clearly looking for ways to utilise the full range of skills available to them, said CIPD labour market adviser Gerwyn Davies, and prepared to entertain non-traditional terms of employment to achieve this. It will be interesting, he continued, to see if economic recovery is accompanied by a labour market “permanently adapted” to cater to workers who prefer to work more flexibly.

By Victoria McDonnell

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