UK businesses relying more on contractors

Friday 26 February 2016

Many businesses in the UK are in a difficult position at the moment. On the one hand, a surge in the amount of work they are taking on means they have an increased need for new staff. However, on the other hand it is getting harder and harder to recruit employees, as there is a severe shortage of talent in many sectors.

This is according to the most recent JobsOutlook survey from the Recruitment and Employment Confederation (REC), which found that UK employment is currently at 74.1 per cent; its highest recorded level. However, while this is good for the British economy in general, it is bad news for companies looking to hire.

Around 95 per cent of businesses are operating at full capacity, which means it is not going to be easy for them to find permanent staff. In fact, REC believes it will become "increasingly difficult" for firms to do this as time goes on.

So what is the answer for companies looking to take on new employees? It seems that more and more of them are turning to temporary workers in order to fill the gaps in their labour market. This is great news for contractors, who can benefit from an upsurge in demand thanks to this development.

REC estimates that 58 per cent of businesses have needed to turn to contractors in order to "respond to growth", as they are unable to take on the permanent employees needed to keep up with demand. Even more impressive is the 90 per cent of companies that need temporary staff in order to provide "key strategic skills".

Kevin Green, chief executive of REC, said: "Options are running out for organisations that want to take on more staff. SMEs and big businesses are both feeling the pressure. We need more skilled people to fill job vacancies in the UK."

Being in demand not only means contractors are likely to be able to find more work; they're also likely to be able to charge more for it. Talented staff members are receiving higher pay across the country, in order to attract and retain people with the right skillsets. Almost half (47 per cent) of UK businesses have awarded employees pay rises in the last year for this reason.

By Victoria McDonnell

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