Report on Jobs: Contractor availability continues to decline

Friday 9 May 2014

Despite more and more people choosing to become self-employed, contractor availability is continuing to decline as demand strengthens.

The latest 'Report on Jobs' by the Recruitment and Employment Confederation (REC) and KPMG showed a sharp decline in temporary worker availability in April. Indeed, last month marked the steepest reduction since December 2000.

This comes in spite of the fact that temporary billings grew at the slowest pace since June 2013.

With availability weak and demand high, pay rates increased at a solid pace, greater than that recorded in March.

Opportunities for contractors are at their greatest volume in the Midlands, with the north posting the slowest rate of growth.

Demand is the most robust in the engineering sector, followed by nursing, medical and care. However, strong rates of growth can be seen across all staffing types.

These conditions are unlikely to change in the near-term either, with the skills shortage putting businesses under pressure.

Kevin Green, chief executive officer of the REC, said: "The jobs market could be jeopardised with thousands of employers not able to find the skills and talent they need to meet increasing demand. The number of candidates available to fill both temporary and permanent jobs is falling at its fastest rate in a decade. In response to this employers are bumping up starting salaries to entice workers they need to join them.

"This dearth of skilled workers means that many organisations will need to improve their candidate experience and also look overseas to find people. The government must do more to support businesses by ensuring that the visa process does not act as a barrier to growth."

Conditions are made worse by the fact that permanent workers aren't putting themselves on the jobs market, according to Bernard Brown, partner and head of business services at KPMG.

Consequently, employers are being forced to raise rates to entice talent, opposed to doing so due to improved confidence.

On the other hand, conditions could improve swiftly as the economy continues to grow. "As consumers begin to spend more in their personal lives, confidence is likely to return in a professional capacity," Mr Brown explained. "When that happens, candidates are more likely to be looking for a new challenge, meaning that employers will have to focus equally on both retention and recruitment."

Yet businesses can't ignore the current brain drain that is taking place in the UK. According to APSCo, this is particularly noticeable in the engineering sector, where contract vacancies have increased by 22 per cent in the last year.

Managing director of Matchtech, Matthew Hancock, said: "Our recent Confidence Index found that over three quarters of UK engineers are doubtful that enough is being done by the government to attract new talent to the engineering industry."

Many contractors are being enticed overseas and over half of engineers claim they would definitely or possibly make the move for work.

This is harming the development of the UK and projects such as HS2 and the expansion of Heathrow could be put at risk if the skills aren't there.

By Victoria McDonnell

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