Demand for contractors falls in October

Thursday 30 November 2017

The number of vacancies for contractors and short-term assignments fell by ten per cent in October compared to the same month a year ago, according to the Association of Professional Staffing Companies (APSCO).

Meanwhile, demand for permanent professionals remained largely stable, increasing by 0.2 per cent year on year.

Contractor vacancies in the engineering field fell by two per cent in October. Meanwhile, demand in IT, finance and marketing fell by ten per cent, 15 per cent and 25 per cent respectively. The number of contractors out on assignment fell by eight per cent during the same period. However, contractors out on assignment in the engineering and finance sectors rose year on year in October by 14 per cent and six per cent respectively.

The Chartered Institute of Personnel and Development (CIPD) reported that the IR35 rules may be to blame for the fall in contractor demand. The organisation said that, following the introduction of the rules to the public sector, employers are now forced to determine employment status, as well as ensure anyone who is not entitled to self-employed status is paid via PAYE.

According to the CIPD, many contractors resorted to boycotting work opportunities as a result of total pay frequently being cut. They also often demanded pay rises for their services or took early retirement in the aftermath of the changes.

Ann Swain, chief executive of APSCO, said: “The overall fall in contract placements can largely be attributed to a 30 per cent drop in IT assignments. This may, in part, be in response to changes to rules around off-payroll working in the public sector, which were introduced in April.

“However, news that the government will not automatically extend these reforms to the private sector without careful consideration should ensure the wider contract market remains strong in the near future.”

Chief executive of the Freelancer & Contractors Services Association Julia Kermode told the CIPD’s People Management that the increase in permanent positions could have a negative impact on the flexible labour market.

She said that ,in markets where skills are short - particularly those that being affected by the loss of non-UK nationals - her organisation’s analysis of job adverts found that there are more “secure, long-term opportunities” than had been present in the past.

She went on to add: “So the increase in permanent roles is likely down to employers needing to attract skills and talent, and offering more long-term opportunities can be a way to do that, particularly if that workforce is otherwise at risk of leaving the UK.”


By Victoria McDonnell

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