Contractor demand boom continues amid falling confidence levels

Monday 30 March 2015

The upcoming election may be causing hiring confidence to falter when it comes to permanent placements but demand for contractors is continuing unabated.

New figures from the Association of Professional Staffing Companies (APSCo) showed that temporary and contract vacancies are up 4.4 per cent across the board year-on-year.

Vacancies are strongest in the media and marketing sector, up nine per cent. This is followed by finance and accounting at 1.5 per cent growth.

According to the Bank of England, this is largely due to the structural shift which has seen the ageing workforce go in search of more flexible working hours.

However, permanent vacancies are starting to cool month-on-month, declining one per cent between January and February 2015. APSCo claims this is mainly due to uncertainty from the general election.

Ann Swain, chief executive of APSCo, said: "As we predicted earlier this year, uncertainty in the run up to the general election, and any associated impact on policy, seems to have temporarily dampened activity as organisations put the brakes on hiring to wait for greater stability."

However, there's no cause for concern, as over the year vacancies have increased by 21 per cent and figures from the Office for National Statistics have shown that in the three months to January the number of people in work increased to 143,000. This takes UK employment to a record high of 30.94 million.

Finance and accounting, IT, engineering and media and marketing have seen considerable year-on-year growth in vacancies, rising by 12 per cent, 27 per cent, 25 per cent and seven per cent respectively.

Nonetheless, the contractor market seems to be in a world of its own. "“Contract vacancy rates no longer directly correlate with the number of permanent positions," Ms Swain said. " A record 15 per cent of the UK workforce is now self-employed, which is a sign of our nation’s desire for flexibility, driven by entrepreneurial spirit."

The number of professionals looking to go self-employed is likely to grow in the future, as support for contractors continues. Indeed, the recent Budget announcement by George Osborne further bolstered the position of the self-employed. Ms Swain explained that the scrapping of class 2 national insurance contributions in the next parliament shows the government's support for contractors.

The self-employed play a vital role in the UK's economy. The National Institute of Economic and Social Research has predicted 2.5 per cent economic growth for 2015. With contractors contributing to a third of growth in employment since 2010, it's important that this group is given the tools and support it needs to help the UK reach its potential.

By Victoria McDonnell

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