Contractors have a key role to play in securing the UK’s economic recovery. That’s the message from several key labour market surveys this month. Engineering and IT contractors continue to top demand tables, as UK organisations try to recruit professional and specialist staff. The recovery is very much two-speed, and contractors must remain sensitive to market trends to ensure they are targeting sectors with growth potential, particularly in non-traditional contractor markets like the small to medium sized enterprises (SME) sector.
In this month’s ContractorCalculator Market Report:
- Online demand for IT and engineering contractors could restore the fortunes of the online jobs market, says May’s Monster Employment Index
- Contractors are the key to the UK’s economic recovery reveals a new report Navigating Choppy Waters, the CBI/Harvey Nash Employment Trends Survey
- The Manpower Employment Outlook Survey shows that SMEs represent a potentially untapped market for contractors, and IT experts and engineers are once again singled out as being in high demand
- Contractors increasingly form a core element of employers’ resourcing and talent planning strategies, reports the CIPD/Hays Resourcing and Talent Planning Annual Survey
- Special projects and financial assignments dominate growth in demand for interim management contractors, reveals the Q1 2011 Interim Management Quarterly Barometer.
IT and engineering contractors see double digit year-on-year growth in online demand
Year-on-year online demand for IT and engineering contractors has grown by 18% and 26% respectively, according to May’s Monster Employment Index (MEI), although the headline index fell by 2 points compared to April.
And although down by 10.5% year-on-year, the MEI for May shows that demand for workers in the public sector, defence and community registered a slight increase of 2 points, or 2.5%, compared to the previous month.
Despite the fall in the headline index, Monster UK & Ireland spokesperson Isabelle Ratinaud is hopeful that online demand growth for contractors in core contracting disciplines will reverse the overall decline in online demand.
“There are still positive signs, particularly with the growth in professional services such as engineering and IT,” says Ratinaud. “We are hopeful that with significant growth in these major areas we will see online recruitment rise in the coming months.”
Flexible labour market “will be a key underpin of our recovery” says CBI director-general
The role flexible and highly skilled contractors have to play in securing the UK’s economic recovery has been highlighted by Confederation of British Industry (CBI) director-general John Cridland in a new report.
According to Navigating Choppy Waters, the CBI/Harvey Nash Employment Trends Survey, “the flexibility of our labour market helped us in the recession”, and contractors, temporary workers and the self-employed now make up a higher share of the UK’s workforce than before the recession.
However, Cridland warns that employment legislation, such as the Agency Workers Regulations (AWR), could yet derail the recovery. “The complexity and prescriptive nature of the current [minimum employment rights] framework has clearly gone too far,” he says.
Contractors should target SMEs as a source of new contracts
Contractors may find that small to medium sized enterprises (SME) become the engine of contract growth in the contracting sector. The Manpower Employment Outlook Survey reports that many SMEs are predicting job creation within their businesses, whilst recruitment by the UK’s largest businesses remains flat.
“SMEs were amongst the first to shed jobs during the recession, but we’re now seeing them build their workforce again and becoming an increasingly important source of job creation in the UK,” explains Manpower UK Managing Director Mark Cahill.
IT and engineering contractors have once again been singled out as being particularly in demand. “The greatest unmet demand is for highly sought-after candidates in national skills shortage roles, such as engineers and IT specialists,” continues Cahill. “Engineers have, it seems, become the new plumbers!”
The greatest unmet demand is for highly sought-after candidates in national skills shortage roles, such as engineers and IT specialists
Mark Cahill, Manpower UK
But despite the avowed intention of the government to reduce the size of the public sector, Cahill says that there’s simply no evidence of it happening. “We’ve been warned for such a long time to expect large-scale public sector job cuts in central government, but in our experience that is just not happening,” he says.
Contractors are used by 29% of UK employers as part of resource and talent planning strategies
Contractors are increasingly forming a core element of the resourcing and talent planning strategies of the UK’s employers. The latest Chartered Institute of Personnel and Development (CIPD)/Hays Resourcing and Talent Planning Annual Survey shows that 29% of UK employers use contractors in this way, an increase of 6% from 2010.
The trend of increasing the use of contractors is likely to continue as skills shortages grow. According to Hays’ Human Resources Managing Director Julie Waddicor, there is “a shortage of professionals with specialist or technical skills”, with job roles “becoming increasingly niche”.
The report reveals that the use of contractors has remained fairly static: 28% of employers have recruited more temporary staff compared to the previous year, 27% have employed fewer temporary workers and 45% remain the same. Not surprisingly, given the growth in the sector in the last 12 months, manufacturing and product organisations are more likely to have increased contractor numbers.
Specialist and critical business projects fuel the increasing demand for interim management contractors
Demand for interim management contractors is at its highest level since the second quarter of 2010, according to the Interim Management Association’s (IMA) first quarter 2011 Interim Management Quarterly Barometer.
There has been a 29% increase in the number of interim management contractors working on special project assignments, 20% winning financial assignments and 32% taking on programme/project management roles.
IMA Chair Jason Atkinson believes that interim management contractors have a vital role to play in the economic recovery. “Interims with vital niche skills in project management and financial expertise who are able to lead companies through tough challenges and deliver new growth are evidently most attractive to businesses right now,” says Atkinson.
He continues: “For many companies, interim managers are ‘just what the doctor ordered’ in terms of helping UK businesses grow both domestically and internationally in difficult times.”