Nearly half of employers intend to increase temp staff numbers

Thursday 27 February 2014

Temporary workers are going to continue to find themselves in high demand over the next three months if new research is anything to go by.

The latest JobsOutlook from the Recruitment and Employment Confederation (REC) showed nearly half of employers intend to grow their temporary workforce.

Indeed, 47 per cent admit they will increase their use of temps over the next three months. In the next four to 12 months, 46 per cent claim they will use more agency workers.

This will be welcome news for contractors and limited companies - although not an entirely unexpected revelation.

Demand for freelancers has been high over recent months, thanks to the skills shortage and recovering economy.

Research from the REC and KPMG suggests engineering contractors are benefiting the most from the current climate and were seen to be the most in demand during January.

Elsewhere, permanent vacancies are also increasing, indicating the return to a culture of hiring.

During the first few weeks of 2014, the REC recorded a significant increase in employers' confidence and willingness to make permanent job offers. Indeed, a peak of 38 was noted - 11 points higher than the same time last year and the highest score since the survey began.

Sixty-nine per cent of employers claim they will make more offers of permanent work over the next three months. This is up four points from January's survey.

Overall, 72 per cent claim they will directly employ more staff over the next four to 12 months - a rise of 13 points since last month.

Tom Hadley, the REC's director of policy, said: "This month’s survey shows a significant jump in the number of employers who are planning to create more permanent jobs in both the short and medium term.

"This is a reflection of employers’ growing confidence in the wider economic recovery as well as their belief in their own businesses."

However, not everyone is so sure this period of strong growth will continue. In fact, the latest Labour Market Outlook from the Chartered Institute of Personnel and Development (CIPD) and SuccessFactors revealed the rate of employment growth has begun to slow.

Furthermore, businesses are intending to give pay awards below the rate of inflation.

The CIPD claims this is all the result of the "productivity hangover" among employers that opted to maintain or increase their workforce when output was falling.

Gerwyn Davies, the CIPD’s labour market adviser, said: "Employment growth, normally a lagging indicator of recovery, seems to have preceded the stronger signs of growth we’re now seeing.  

"So it is unsurprising that employment intentions are now dipping just as economic growth seems to be taking hold, with employers needing to tackle the major productivity hangover affecting the UK economy."

According to CIPD figures, net employment has actually fallen to +16 from +24 in November 2013. These figures represent the proportion of employers intending to increase total staffing levels and those that plan to lower them in Q1 2014.

However, optimism is higher in the manufacturing and production sector, posting =34, compared to the service sector which had a balance of +21.

By Victoria McDonnell

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