Contractor demand and agency billings accelerated at a marked rate during October 2015. Despite this, candidate supply still remains well short of demand. As a result, a contract-rich market is developing in certain sectors, suggesting now is a good time for employees to consider taking the leap into contracting.
This is according to the Recruitment and Employment Confederation (REC) and KPMG Report on Jobs for October 2015, which points towards the construction sector as one where contractors can expect significant demand for their services.
“While hiring continued at a pace across most areas of the economy, the figures point to a worrying development in the construction sector,” highlights Bernard Brown, Partner at KPMG.
“It is clear the industry is suffering from a chronic skills shortage along its entire supply chain, with recruiters struggling to meet demand for roles ranging from architects to construction workers.”
This comes in spite of a significant rise in contractor agency billings, which grew at the strongest rate recorded since July 2015. Roughly a third of contractor agencies contributing to the survey reported an increase in billings overall, with the Midlands enjoying the sharpest rate of growth.
“This month’s Report on Jobs shows that more fresh talent is needed in the contracting sector,” notes ContractorCalculator CEO Dave Chaplin. “And those not currently in work can re-enter the market with confidence of sourcing contracts.”
The increase in billings wasn’t enough to close the increasing gap between supply and demand, as a strong increase was also recorded in terms of contractor vacancies. Meanwhile, the candidate shortfall continued as contractor availability fell in October, at a similar rate to that seen during September.
This growing margin has inevitably translated into higher income for contractors, with data revealing a further solid increase in hourly rates of pay. When asked if hourly pay rates were higher, lower or the same as the previous month, contractor recruiters reported a net increase of +17, the highest increase recorded since April 2015.
Whilst this may be good news for contractors, REC chief executive Kevin Green raises concerns over its sustainability: “Employers report an increasing number of skills shortage areas in both the public and private sector. Starting salaries continue to rise as businesses battle to attract the people they need but it’s unclear how much longer this trend can continue.”
Despite being a sector badly in need of suitably skilled contractor candidates, construction remained near the foot of the contractor demand league table, coming in eighth. This is most likely as a result of clients favouring permanent hires in a bid to guarantee the completion of infrastructure projects.
Meanwhile, IT & computing jumped up a couple of places to fourth, displacing the engineering sector which fell to sixth. Accounting and financial came in fifth.