The UK’s contracting market continued to strengthen during November 2013. As demand for contractors increases, rates are rising and contractor availability continues to fall.
This is according to the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, which also highlights that skills shortages continue to plague both the contract and permanent labour markets.
“We enter the New Year with job vacancies increasing at their fastest pace in 15 years,” notes REC CEO Kevin Green. “The fact that our figures show…salary growth hitting a six-year high, combined with continued skill and talent shortages, indicates that we can expect salaries to increase and job fluidity to accelerate into 2014.”
The ongoing shortage of available contractors and the worsening skills shortages suggest that now is a good time for permanent employees who are considering taking the leap into contracting to take action.
The demand dynamics of the core contracting sectors experienced some interesting changes during November. The blue collar and trades sector moved into first place in the demand table, from second in October, displacing engineering into second place.
Construction, which was in fourth place during October and has undergone impressive contractor demand growth over the last six months, dropped to ninth place in November. This may be as a result of the seasonal slow-down in the sector during the winter and over Christmas.
There was little change with the other core contracting disciplines: IT moved up a place into fourth; accounting and financial was up a place, to fifth; and executives moved up a place into eight. Financial contractors are experiencing much stronger market conditions in fifth place, compared to occupying a negative-growth ninth place for much of 2013.
Although the UK’s contracting market continues to look healthy, KPMG’s partner and head of business services Bernard Brown warns that the skills shortages and low contractor availability that favour contractors are not so kind to contractor clients.
“Employers are trying to tempt top talent to change jobs by offering more in the way of cash or incentives,” he says. “It’s a tactic that may bring short-term success, but the risk of falsely inflating the jobs market must be considered. Left unchecked, it could put unnecessary and unsustainable pressure on businesses just at the time their cash-flow problems are easing.”