UK tech sector pulling ahead for job creation

Thursday 1 May 2014

The UK tech sector is pulling ahead of other industries when it comes to employment, according to a new research.

Nearly half of companies (49 per cent) intend to take on more staff over the next 12 months, the latest KPMG/Markit Tech Monitor UK report revealed.

What's more, the PMI Employment Index shows current job hiring is near its strongest point in three years and remains faster than the UK private sector average.

For contractors in the sector this is good news, with strong hiring intentions pointing towards high demand for both permanent and temporary workers.

The sector is also experiencing a period of positive growth - something which bodes well for employment in the future.

In the first quarter of 2014, growth was only marginally less than the ten-year high recorded at the beginning of 2013.

This has been thanks to a jump in incoming work and the lowest rate of cost inflation in over four years, according to KPMG.

In March, the UK Tech PMI Index posted a reading of 60.0 for business activity - considerably above the 50.0 no-change mark. This figure constitutes a near ten-year high, which was recorded at 60.9 at the end of 2013.

Conversely, the rest of the UK economy generated a business activity reading of 58.1 on average during the first three months of the year. This illuminates just how strong the tech sector is proving to be and its potential for driving growth.

Consequently, Tudor Aw, head of technology at KPMG, is calling for the industry to receive acknowledgement for its achievements. "It is time the sector received the recognition and support it deserves," he said. "There are some fantastic advocates in government and business for the UK’s buzzing start-up scene but we must not neglect the wider tech sector."

"We should ensure that the sector as a whole gets the profile and support that it needs such as focused government policies that help develop and encourage education in STEM subjects, and ease access to tech talent on a global basis," Mr Aw continued.

Tim Moore, senior economist at Markit, reiterated the important role the tech sector plays in the economy. He stated that the industry has shown its ability to deliver productivity gains across the wider economy.

Mr Moore is confident that conditions will only continue to improve this year. "Tech companies stand to benefit from two key domestic economic tailwinds this year, which are rising business investment as confidence in the recovery takes hold and improving household spending power as wages finally start to climb more quickly than consumer prices," he said.

For contractors this will translate into greater demand and higher rates as businesses look to highly skilled professionals for the talent they need to grow.

Recent statistics from the Recruitment and Employment Confederation showed almost half of businesses are planning to increase their use of contractors over the next year across all sectors.

With the IT industry pulling ahead of its contemporaries when it comes to hiring, they are likely to be spearheading this trend.

By Victoria McDonnell

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