Demand for contractors and other permanent staff has risen again across Scotland, new figures show.

Monday 20 May 2013

Contractor demand has risen again in Scotland throughout April, according to new research.

Billings for temporary and contract staff rose at the fastest rate for three months, according to the Bank of Scotland Report on Jobs, despite a marginal decrease across the UK as a whole that was the first in nine months.

Many Scottish recruiters simply put the improvement down to increased demand, but others suggested that increased business activity was behind the need for more contract workers.

This is borne out by the fact that permanent placements also rose across last month - and at a faster rate than the UK as a whole. The Report’s Permanent Staff Placements Index stayed above the 50.0 mark representing no change at all for the second month in a row, staying at the highest level for a year. Again, a more buoyant job market is keeping recruiters north of the border busy, as the figures suggest the confidence is returning to the Scottish economy.

This explains why Scottish contractors are benefiting from a wider range of opportunities. The number of vacancies for contract workers increased sharply at the fastest rate for three months and, interestingly, faster than was the case for permanent vacancies. Compared to the UK, which saw the weakest rise in vacancies for nine months overall, it appears that the labour market in Scotland is in better health.

If demand for contract workers is growing faster than for permanent staff, this might suggest that businesses have noticed an increase in activity which is not yet solid enough for some to commit to hiring permanent employees.

But when it came to availability, it was temporary staff and contractors who posted the biggest rise. Whereas permanent staff availability decreased slightly across April, among temporary workers the rate improved for the third consecutive month, roughly in line with changes in the UK overall - indicating that contractors and other temporary staff are in a good position to take advantage of a growing number of vacancies.

Hourly rates for contractors rose for the second month in a row, although pay grew more slowly than it had in March. Salaries for permanent workers increased over the month, but did so more quickly to reflect a growth in demand - they rose at the fastest rate since May 2012. Remuneration for both contractors and permanent workers rose broadly in line with the UK average.

But for contractors, the best news is that demand is still particularly strong in some of the key industries in which self-employed professionals choose to work.

Medical staff enjoyed the highest demand over the month, incorporating locums and dentists as well as nursing and support staff. But engineering and construction was not far behind, with IT and computing taking third place, illustrating a lack of specialist skills in the industry which shows no sign of easing.

Among permanent staff, it was IT that reported the strongest demand, demonstrating the keenness of many employers to build up their in-house technical expertise. The engineering and construction sector was not far behind, either, pointing to a widespread need for these skills which, in the wake of unimpressive permanent availability figures, it will surely fall to contractors to satisfy.

By Victoria McDonnell

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