Hays: promote use of contractors to boost flexibility

Tuesday 1 October 2013

Governments around the world should actively encourage businesses to hire contractors and freelancers when their workforces need more flexibility, according to a new report from recruitment firm Hays.

In its latest Global Skills Index, the company says that a slow return to economic growth is shedding new light on the extent of the skills gaps in many economies. The figures show that of the 30 countries studied, as many as 18 are currently experiencing skills deficits, compared to just 12 where few if any symptoms of this problem are visible. Skilled labour markets have contracted in most countries, with no single part of the world suffering less than the others - for example, European and Asian countries appear at both ends of the spectrum. Although the UK is suffering far less than nations such as Japan, the US and even Germany, it is faring much worse than Italy and Hong Kong.

For many countries, large rises in unemployment are being met by a slurry of new vacancies, indicating that there is a clear disjoint between the skills of the local workforce and those required by employers. If the global economy is to surge forward in the coming months and years, Hays argues governments will need to develop the right policies and then implement them effectively to make it easier to take on new staff. Of course, flexible workers are likely to be crucial as businesses look to respond to changing demand.

The report shows that economies are far less likely to suffer from talent mismatches and high long-term unemployment if they can make use of mechanisms such as flexible contracts, wage adjustments and immigration as highly skilled workers move to pursue fresh opportunities. However, for many economies this is still extremely difficult to achieve. To generate business conditions where employers have better control over the shape of their workforces, Hays is suggesting that governments should actually endorse the use of temporary and contract talent to supplement permanent staff.

“In my view, the most critical point this year is that the Hays Global Skills Index demonstrates that the efficiency of labour markets is not directly related to the current state of the economy,” Alistair Cox, Hays plc chief executive, writes in his introduction to the report. “Our Index shows structural factors have the greatest impact on the efficiency of the labour market.”

Among its other recommendations for governments, Hays is calling for shifts in immigration policy that will increase the geographical mobility of highly skilled workers. Not only is this designed to ensure that businesses can recruit from abroad when they need specific skills that are hard to find, but it will also make it easier for freelancers to pursue overseas projects outside of the EU.

On a broader scale, the report urges governments to consider sizeable reforms to employment law and regulations to make businesses more flexible, including the legal provision making it simpler for companies to employ workers on short-term contracts. Hays also recommends giving all staff the chance to work overtime in order to cope with periods of high demand - potentially meaning the relaxation of rules like the EU Working Time Directive.

By Victoria McDonnell

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