Rec: It's going to be a positive year for contractors

Thursday 30 January 2014

The year ahead is going to be a positive one for self-employed professionals and contractors, according to new figures.

Following the release of its latest JobsOutlook survey, the Recruitment and Employment Confederation (REC) has indicated that conditions bode well for 2014.

Indeed, accounting services for contractors will be needed to help freelancers manage their increasingly ballooning finances, with 48 per cent of businesses claiming they will increase their use of agency workers in the first quarter of the year.

Forty-three per cent said they would keep temporary staff numbers the same, while five per cent intend to decrease their agency headcount.

For the year ahead, 38 per cent of employers plan to increase their use of contractors, while 55 per cent will keep numbers the same. Just seven per cent intend to decrease their use of agency temps 'slightly'.

REC director of policy Tom Hadley claims the results point to "a positive year ahead for business and jobseekers".

"Our data shows business confidence is continuing to build and the jobs market recovery will gain further momentum over coming months," he said. "The challenge ahead will be to ensure that the demand for staff and specific skills can be met."

REC's JobsOutlook also found optimism for the year ahead is high among employers, with four in ten believing their organisation will perform better in 2014 than in 2013. Twenty-two per cent expect things to remain the same over the next 12 months.

Positivity can also been seen in the permanent hiring intentions of businesses. Sixty-five per cent plan to take on more permanent staff in Q1, with 27 per cent expecting no change. Just eight per cent intend to decrease their headcount slightly.

When asked about employment plan over the next 12 months, 59 per cent of businesses said they will end the year with a larger permanent workforce, while 36 per cent expect headcount to stay the same.

"This tracking of employer sentiment and future hiring plans is a leading indicator and strong predictions from the second half of 2013 have been borne out by January’s employment and GDP figures," Mr Hadley said.

However, the REC is still concerned that the skills shortage could throw a spanner in the works for employers intending to grow their headcounts this year.

Research has shown that firms could have to turn down new business if they cannot source the talent they need to increase their capacity.

Thirty-one per cent of companies claim they have no spare capacity and will need to hire new staff if work increases. A further 54 per cent say they only have a little spare capacity and if new business arises they might have to take on additional workers.

However, a shortage in technical and engineering skills has been noted and employers are growing more concerned about finding appropriate candidates when the time arises to grow their headcount.

Computing and IT, and education and training are the areas where employers are also finding the most difficulty sourcing permanent employees.

"The shortage of candidates with the skills required for a growing number of vacancies is a looming problem. Politicians and business leaders need to work together to find solutions to the mismatch between what employers need and what jobseekers have to offer," Kate Shoesmith, REC head of policy, said.

By Victoria McDonnell

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