Contractors look set to benefit from the global skills and talent shortage, as client organisations both at home in the UK and worldwide can’t get enough engineers, IT professionals, construction workers and financial experts. Those contractors with skills in these areas are in increasingly relied upon by companies that are seeking business growth. And lucrative times are ahead for those contracting in digital and big data markets, where their skills are sought after by businesses finding it increasingly hard to keep pace with digital innovation.
In this month’s ContractorCalculator Market Report:
- Skills shortages continue to provide opportunities for those contractors in specialist disciplines, says the April 2015 Recruitment and Employment Confederation (REC)/KPMG Report on Jobs.
- The latest Recruitment and Employment Confederation (REC) JobsOutlook survey indicates that businesses are relying more on contractors to enable business growth, but the shortfall of available candidates causing a wider problems.
- Scotland’s contracting market improves after softening in recent months, with particular strength shown in the Dundee games industry, according to the Bank of Scotland Report on Jobs for April.
- Digital and big data skills are at a premium as large companies struggle to keep up with innovations, heralding the rise of the chief digital officer (CDO), says the Harvey Nash/KPMG 2015 CIO Survey.
- According to the Manpower Group 2015 Talent Shortage Survey, contractors are a vital source of talent globally, as employers struggle to fill positions.
Contractors with niche skills in demand, as knowledge gap increases
Contractors with niche skills are in increasing demand as candidate numbers continue to fall, according to the April 2015 Recruitment and Employment Confederation (REC)/KPMG Report on Jobs. Temporary pay is increasing at the fastest rate since July 2007, but a jobs crisis looks imminent due to growing skills gap.
During April, contractor agency billings increased, but the rise was the slowest for six months, suggesting a lack of suitably skilled contractors to fill a growing number of vacancies.
ContractorCalculator CEO Dave Chaplin believes that this skills and candidate shortage is a good opportunity for contractors: “Demand for contractors in specialist disciplines, such as IT & computing, continues, but while the shortage of specialists in these areas remains contractors are well placed to fill these gaps.”
Kevin Green, REC chief executive warned of a deeper problem: “This is good for job seekers…however we question how sustainable this jobs boom is as skill and talent shortages become rife. The availability of staff has been falling for two years, with 40% of recruiters saying that the situation is getting worse month on month.”
Contractors in IT and engineering needed, as skills get harder to find
Contractors with IT & computing and engineering expertise will see a growing demand for their services as employers look to them to close the skills gap.
The latest JobsOutlook by the Recruitment and Employment Confederation (REC) indicates that businesses are relying more on contractors to enable business growth. If this shortage continues, it may affect other sectors, increasing contractor demand further. More than 84% of respondents said they hire contractors to access ‘key strategic skills’.
“Contractors in the IT arena need to be on standby as this core contracting area is of most concern for UK businesses. Those already contracted in this sector are likely to be retained, so they should be seeking advantageous renewal deals,” said ContractorCalculator CEO Dave Chaplin.
Kevin Green, REC chief executive, added: “The second trend that is starting to emerge is employers hiring more people on short-term assignments because they can’t find permanent staff with the skills and that they want to flex their resource to meet volatile demand.”
Contractors should remain in place as market recovers in Scotland
Contracting in Scotland in the core disciplines of IT & computing, engineering and accounting/financial is recovering after several months of the contract market in the country softening. The latest Bank of Scotland Report on Jobs shows a sharp decline in contractor numbers available in April. This coincides with increased demand, though at a slower rate.
If this trend continues, it could lead to the skills shortages similar to that experienced in other areas of the UK, and encourage contractors to stay in Scotland rather than seek contracts elsewhere in the UK..
“Contractor billings and pay rates in Dundee rose significantly during April, indicating that the UK’s video games capital remains in rude health,” said ContractorCalculator CEO Dave Chaplin. “The only dip in contractor agency billings was recorded in Aberdeen, showing that the low oil price continues to have a negative impact on the oil and gas sector.”
Donald MacRae, chief economist at Bank of Scotland, was upbeat: “Scotland’s labour market continued to improve in the month. The number of people appointed to both permanent and temporary jobs rose modestly while the number of vacancies increased in the month.”
Digital and big data contracting surges as companies struggle to keep up
Prospect for contractors with digital and big data skills are looking very positive, as a result of the efforts of large organisations struggling to stay abreast of digital innovation. According to the Harvey Nash/KPMG 2015 CIO Survey, the race to innovate has left many organisations lacking a comprehensive digital strategy and the skills to implement it.
Despite attempts to recruit into digital and big data from other areas of IT, the skills gap is one-third bigger than in 2013. The CIO report reveals that only one in ten CIOs believe their organisation will be unaffected by digital in the future.
“Contractors who can acquire the right skills and then target clients and market their digital and big data capabilities effectively can look forward to a strong forward pipeline of lucrative contracts,” notes ContractorCalculator CEO Dave Chaplin.
Contractors often target programme and project managers for new contracts, but the chief digital officer (CDO) role is becoming ever more important.
Albert Ellis, CEO of Harvey Nash Group, believes that client organisations need to act fast or be left behind:“What’s most striking about the results is the speed of change. In the seventeen years we have conducted the survey we have never seen a new role grow so quickly as we have the CDO.”
Contractors make gains from global clients unable to hire key talent
Contractors remain an essential supply of talent for clients desperate to fill the growing skills gap, according to the Manpower Group 2015 Talent Shortage Survey.
The survey of more than 41,700 hiring managers in 42 countries identified an increase in the proportion of employers having difficulty filling positions from 36% in 2014 to 38% this year. More than half of employers surveyed said that facing a talent shortage is having a high (20%) or medium (34%) on their ability to meet client needs.
The core contracting discipline of engineering is third in the global top 10 list of ‘talent that’s hard to find’, with Accounting & Finance at seventh and IT at ninth. The survey cites a lack of applicants, technical competency and experience as the top three reasons for the shortfall, and blames global employers for not doing enough to address the problem.
This talent shortage bodes well for contractors, as clients are increasingly turning to new talent sources – such as the contingent workforce - to tackle these challenges.