Contractor billings rising faster

Friday 12 December 2014

Demand for umbrella company contractors and limited company contractors rose at a faster rate during November.

This is according to the latest Recruitment and Employment Confederation (REC) and KPMG Report on Jobs.

While agency billings from the employment of temporary and contract staff has been on the up generally, the rate of expansion had increased compared to the last survey period.

This demand for temporary employees was led by IT. REC found that the short-term staff that were most in demand during November worked in IT and Computing. They were only marginally ahead of Blue Collar workers. Meanwhile, temporary construction workers were the ones that registered the weakest growth in demand.

Even though IT contractors were the most sought after temporary workers, demand for them actually fell in November. During September, IT contractors got an index score of 66.2, which fell to 65.5 in October and then to 63.3 in November.

Any reading above 50 indicates growth. However, the falling results suggest that the IT labour market could be preparing for a slowdown. This is something that typically occurs in the run up to Christmas.

When it comes to rates of pay, REC found that growth had been solid for temporary positions and increased at a slightly faster rate compared to the previous month.

As demand has been on the increase among contractors, the availability of temporary staff has been falling. This was no exception during November, however, the rate at which temporary staff availability fell was the slowest seen since March.

Temporary staff saw the biggest growth in demand in the Midlands during November, while it was weakest in the South of England.

Growth of demand was stronger for roles in the private sector than the public sector but, in both cases, there was a faster rise in demand for permanent employees than contractors.

Commenting on the results, chief executive of REC Kevin Green said: "it's been a strong year for the UK labour market."

He noted that business confidence appears to be up and employers are prepared to make generous offers to new recruits to attract the right people. What's more, starting salaries for permanent employees have been getting better month by month because of the increased competition for candidates with the right skills.

However, partner and head of business services at KPMG Bernard Brown was less confident about the results. He said that the rate at which permanent contracts were being signed was slowing, which follows on from an unexpected fall in investment during the third quarter of 2014.

Mr Brown added: "With political uncertainty in the UK, and in particular the country's position on Europe, could this be the start of a negative trend in the jobs market? Let’s hope not and that the initiatives announced in the Autumn Statement convert to new employment opportunities.”

Permanent employees in IT have not had as much luck in their job sector as their temporary equivalents have. Every month since August, the growth rate for these workers has eased and is now smaller than it was at the same time one year ago.

By Victoria McDonnell

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