Contractor availability continues its decline

Monday 11 August 2014

Contractor availability is continuing to decline, as demand for temporary staff increases across the country.

This is one of the key findings of the latest Report on Jobs from the Recruitment and Employment Confederation (REC) and KPMG.

Temporary/contract staff availability fell at the fastest pace since March 1998, continuing its rapid decline.

This is driving salary rises, as businesses try to entice talent by offering attractive pay packages. Contractors are seeing their rates rise month-on-month, despite the fact pay growth has eased from the 79-month high that was recorded in June.

Andrew Fahey, commercial director at Brookson, said: "The jobs market for contractors is more robust than it has ever been. The economy is getting back into full swing and businesses are realising that if they're going to grow, they're going to need to be able draw on flexible labour. However, there's a catch - a lack of availability. While more and more people are choosing to become self-employed, it's not enough to satisfy demand and if it continues this way, businesses are going to have a real problem on their hands.

"The focus now needs to be on attracting talent. Organisations are aware of this and have responded by giving contractor rates a hike. Nevertheless, it's important that they remember that it's not all about money for the self-employed. Contractors want rewarding work and to be properly supported. Businesses that can get a reputation for these things will become a much sought after employer."

Current conditions for contractors are symptomatic of the employment market at large. Job vacancies increased at the fastest pace since January in July. Activity is mainly concentrated in the private sector, but the public sector is also becoming more prominent.

The number of people placed into permanent and temporary roles during July by recruitment agencies increased at the fastest rate in five and seven months respectively.

There are of course regional and sector variations. The south continues to be the main driver of demand for permanent staff, while the Midlands saw the strongest expansion of temporary billings.

All nine monitored temporary/contract staffing categories recorded higher demand during July, with construction workers the most sought-after.

Kevin Green, chief executive officer at the REC, said: "The UK’s post-recession problem is skill and talent shortages. The economy is going to be constrained by this ongoing talent crisis if employers keep doing business as usual. Hirers need to take on more young people and train and develop their employees like never before."

Speaking about the construction industry in particular, Mr Green said the lack of skilled people capable of taking on jobs as site managers, joiners and electricians could cause problems. Indeed, the UK may be unable to build vital homes and infrastructure if this doesn't change.

By Victoria McDonnell

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