Contractors across the core contracting disciplines of engineering, IT and oil and gas can look forward to a target rich contract environment in 2012 – if they target the right sectors in their markets. Upstream investment by energy firms will present new contract opportunities for contractors in exploration and production. Manufacturing is settling into a two-speed market, in which canny contractors able to pick the winners can turn 2012 into a profitable contracting one. And the contracting sector as a whole received a global PR boost at the World Economic Forum (WEF) in Davos this year courtesy of Manpower, as its boss presented the latest thinking on what he calls “the contingent workforce”.
In this month’s ContractorCalculator Market Report:
- Engineering contractors saw a huge increase in online demand during 2011, according to the December Monster Employment Index
- Salary Services and Jobadswatch.co.uk reports that IT contractors experienced a contract vacancy growth rise of 5.1% in the fourth quarter of 2011, with 25% more contracts advertised in the period compared to same period in 2010
- Oil and gas contractors look set to benefit from significant upstream investment by major energy firms in 2012, according to figures from a new report by the Economist Intelligence Unit and GK Noble Denton
- Manpower’s theory of the Human Age and ‘talentism’, which places the “contingent workforce”, including contractors, at its core, has reached a global business audience via the World Economic Forum in Davos
- The latest EEF Executive Survey 2012 suggests that the UK manufacturing sector is still performing strongly in some areas, and highlights those sectors within manufacturing likely to offer the best contract prospects.
Engineering contractors top 2011 online growth league table
Online demand for engineers grew by 28% in 2011, closely followed by online demand for construction and extraction workers at 24%, according to December’s Monster Employment Index (MEI). The core contracting discipline of IT was not far behind, showing a more modest 17% annual growth, but there was no growth in IT demand between November and December.
Overall, the Monster Employment Index grew by one point, or 0.7%, in December, to reach a six-month high. Monster UK & Ireland spokesperson Michael Gentle explains: “The recruitment market is still active, with the Employment Index reaching its highest level since June and many sectors, including engineering and IT, showing a more positive picture than this time last year.”
In Europe, the UK is the second best performing labour market after Germany, which showed 32% year-on-year online demand growth in 2011. The UK is in second place with 6% growth and Sweden is third with 4% growth. Online demand for contractors in Belgium, France, Italy and the Netherlands fell during 2011.
The recruitment market is still active, with the Employment Index reaching its highest level since June and many sectors, including engineering and IT, showing a more positive picture than this time last year
Michael Gentle, Monster UK & Ireland
IT contract vacancies increased by a quarter during 2011
There were 25% more IT contract vacancies in the fourth quarter of 2011 compared to the same period in 2010. The January 2012 Quarterly update by Salary Services and Jobadswatch.co.uk also showed that IT contract vacancies in Q4 were up by 5.1% compared to Q3.
Agencies continue to dominate the IT recruitment scene, with recruiters placing 87.5% of all IT permanent and contract role advertisements. The reminder was placed directly by client organisations. Ad placement growth by both recruiters and clients is increasing: 1.1% and 2.7% respectively.
According to Jobadswatch.co.uk, the increasing demand for IT contractors bodes well for the IT sector as a whole: “Historically, contractors are the first to be discarded and the first to be employed. This is a good indicator of the state of IT recruitment.”
Location is now a key factor for IT contractors seeking work. A marked north/south divide is emerging, with 83.5% of all contract vacancies being advertised in the south of the UK, and contract assignment advertising is falling in the north of England and in Scotland.
Upstream oil and gas contractors to benefit from renewed investment
The prospects for oil and gas contractors working in exploration and production could improve significantly during 2012, particularly in North America, the Far East and South East Asia. This is according to a new report, Big spenders: the outlook for the oil and gas industry in 2012, by The Economist Intelligence Unit and consultants GL Noble Denton.
The report, which draws on insights from the executives of top global oil and gas and energy firms, shows that 41% of firms are planning increased investment in exploration activities. But, following the 2010 Deepwater Horizon Macondo well blowout in the Gulf of Mexico, 55% of oil and gas executives think that drilling permits have been more difficult to obtain as a result.
This capital investment will directly lead to fresh contract opportunities, but energy firm executives are already warning of skills shortages. These have been highlighted as the second major barrier to growth in the sector over the next 12 months, up from fifth place in last year’s survey. Whilst bad news for clients, this reduced supply of skilled contractors could see opportunities and rates increasing throughout the year.
Contractors underpin the ability of companies to succeed, Davos told
Contractors form a core component of the “contingent workforce” that enables companies to successfully navigate the “Human Age”. This is according to new research by recruiter Manpower, presented to the World Economic Forum (WEF) in Davos by its Group Chairman and CEO Jeff Joerres.
“Clients are telling us they need to be more flexible and agile to react to this environment. Manpower is seeing the global contingent workforce grow as a result," Joerres told WEF delegates. He suggests that companies can do more with less by using contingent workers, such as contractors, who have highly developed skills and a keen project focus.
Manpower adds that in the Human Age,“it will be human potential itself that will be the catalyst for change and the global driving force economically, politically and socially”. The report continues: “... [that it] will require business and government leaders to re-examine how they unleash and leverage human potential in an increasingly volatile and shifting world.”
If the theory of the Human Age gains momentum within the broader UK and global client community, it could be of huge benefit to contractors. This is because highly skilled and flexible knowledge workers are at the heart of the rise of what Manpower calls “talentism” – putting unprecedented value on talent as the driver of business success.
Contractors can target growth markets in manufacturing for 2012 contracts
Contractors can target the manufacturing markets forecast to grow strongly in 2012 by using the latest EEF Executive Survey. This highlights that the UK manufacturing sector is running at two speeds, so contractors have to pick their targets carefully to ensure they choose the winning sectors.
Manufacturing firms operating in the transport, mechanical equipment and rubber and chemicals sectors offer the best prospects in 2012. These sectors performed well at the end of 2011 and are forecast to continue to do so throughout 2012. Conversely, electronics and metals are doing less well.
Contractors may also find themselves targeting larger firms for contracts. This is because respondents to the survey from larger firms have indicated that they plan to take on more temporary and contract staff rather than permanent hires.
However, the EEF warns that, although the intention to recruit may be there, actually finding workers with the right skills may be a challenge. Clearly this presents an opportunity for contractors with existing skills suitable for the sector, or who are able to quickly retrain.
Published: Tuesday, February 07, 2012
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