Contractor hiring keeps growing

Tuesday 10 February 2015

It seems that contractor hiring is continuing to grow, although the rate at which this is happening is starting to slow.

The latest Report on Jobs from the Recruitment and Employment Confederation (REC) and KPMG shows that permanent and temporary appointments kept rising in January but the rate at which this happened has slowed somewhat.

Billings for temporary staff grew at a more moderate pace, with the least marked increase seen since October 2014. Similarly, the rate of expansion of permanent staff placements

Even so, January saw an accelerated rise in demand for staff. The level of job vacancies rose at the strongest rate that has been seen for three months and this higher rate of growth was seen for both permanent and temporary vacancies.

In terms of pay, average starting salaries for both temporary and permanent positions kept rising in January. However, this was seen more among permanent positions than temporary ones. Permanent positions saw the rate of growth in starting salaries reach a four-month high. Meanwhile, temporary pay went up put at the slowest rate seen in nine months.

It appears that the tight availability of talent is beginning to slacken too among temporary workers. This group saw the weakest rate of decline in availability for 11 months. However, for permanent workers, there was a marked deterioration in those that were available, despite the fact that the slowest rate seen for a year.

While demand for temporary staff rose across all sectors, it was in medical, care and nursing where growth was strongest. Meanwhile, temporary executives saw the slowest rise in demand.

The region where growth in temp billings was strongest was the Midlands, while the South saw the slowest expansion. It was in the private sector where jobs growth was strongest. Similarly, it was in the Midlands where growth in permanents appointments grew fastest. Yet it was in London where the rate of increase in permanent appointments was the slowest.

Commenting on the results of the Report on Jobs, chief executive of REC Kevin Green said: "The number of vacancies for permanent and temporary jobs continues to increase rapidly as confident businesses expand their workforces.

"January saw more people secure a new permanent job via a recruiter than in December and the decline in the number of available candidates means competition for skilled workers is driving up pay. With record levels of employment and falling inflation, this means many workers should feel better off in 2015 than they did in 2014.

"It’s encouraging to see these positive trends aren’t focused just in the South East, with all regions reporting rises in people finding jobs and pay increases with the North and the Midlands both reporting robust growth."

Nevertheless, Mr Green noticed some potential pitfalls moving forward as he noted that the rate of growth for placements was slowing. He said that skills shortages was still resulting in higher rates of pay but that this is still an area that could pose a challenge to sustainable business growth in the medium and longer term.


By Victoria McDonnell

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