Contractors are justified in feeling cautiously optimistic as the trend to recruit contractors and temps increases across the board, with niche sectors such as oil and gas recovering sharply. The IT contracting sector’s biggest client, the financial services sector, has shown a dip in activity, but it is too soon to tell if this is a blip, or the sign of a more serious long-term trend. The beleaguered services sector is starting to show signs of a split. This could leave contractors as winners or losers, with consumer-facing businesses enduring continued decline, whereas business investment is starting to increase.
In this month’s ContractorCalculator Market Report:
- January’s Monster Employment Index shows online IT contractor demand expanded by over a third during 2011, and contractors are urged to move on from disappointing roles
- Contractor recruitment is forecast by the CIPD/KPMG Labour Market Outlook for Winter 2010-11 to accelerate, accounting for 25% of private sector and 40% of public sector new recruits
- The IT contracting sector is slowly recovering, but total UK IT vacancies across all sectors and types of contract are half those advertised before the recession, reports the CWJobs.co.uk JobAdsWatch.co.uk January 2011 Quarterly Update
- Three key surveys identify that both the UK and the global oil and gas sectors are emerging rapidly from recession, ready to take on greater numbers of oil & gas contractors at increased rates
- Contractors may wish to consider switching sectors based on the latest results from the CBI Service Sector Survey, which shows consumer-facing businesses enduring decreasing business volumes versus increased investment in business to business.
Annual growth in online demand for IT contractors leads all sectors
Online demand for IT workers increased by 34% during 2010, the highest growing sector out of twenty-one industry sectors monitored by the Monster Employment Index. January 2011’s index also reveals that Marketing, PR and Media lies in second place after IT, where online demand for workers grew by 28% during 2010. The next key contracting discipline is engineering in fourth place, which has grown 21% year-on-year. Month-on-month, the index fell slightly in January, but according to Monster this is ‘a usual trend’ as decision-makers return after the holiday season.
Monster UK & Ireland spokesperson Isabelle Ratinaud urges contractors not to feel trapped in assignments and to change roles if the opportunity arises. “It’s encouraging to see that more job opportunities are available now than this time last year,” explains Ratinaud. “A healthy recruitment market is an indicator of a healthy economy, so it’s critical that candidates make the most of the opportunities that are out there.”
A healthy recruitment market is an indicator of a healthy economy, so it's critical that candidates make the most of the opportunities that are out there
Isabelle Ratinaud, Monster UK & Ireland
Contractor recruitment will accelerate in 2011, accounting for a quarter of private sector hires
Contractor recruitment is forecast to accelerate in early 2011, and is set to account for a quarter of new hires in the private sector and four in ten new recruits in the public sector.
This is according to the Chartered Institute of Personnel and Development (CIPD)/KPMG Labour Market Outlook for Winter 2010-11, which goes on to warn that the private sector is not generating enough jobs fast enough to prevent the jobs market experiencing a ‘relapse’. Further state intervention is required, notes the report.
“The private sector continues to generate new jobs, but we are some way off the jobs boom we are hoping for,” says CIPD Public Policy Adviser Gerwyn Davies, “It is more important than ever that the government continues its growth efforts in the private sector so as to offset the jobs gloom in the public sector.”
Contractors look set to benefit from the uncertainty in both sectors as organisations choose contractors and other flexible workers over employees to manage short-term capacity needs.
IT contractor demand is recovering, but remains at half pre-recession levels
IT contractor demand is slowly recovering, with an increase of 0.9% in the number of IT contract positions advertised in the final quarter of 2010 compared to the previous quarter. There has also been an uplift of 5% for contract rates compared to the same period in 2009.
However, the figures published in the CWJobs.co.uk JobAdsWatch.co.uk January 2011 Quarterly Update also reveal that the overall number of permanent and contracting positions advertised is at half pre-recession levels.
IT sector recruitment is still dominated by recruitment agencies, which account for 87.5% of all advertisements, although the number of positions advertised directly by companies has increased by 5.1% over the quarter.
The financial services sector, traditionally the largest UK consumer of IT contractors, advertised for 5.5% fewer vacancies, showing the first fall in financial services sector IT recruitment since 2009.
Oil and gas contractors experiencing increased rates as oil & gas sector booms
Oil and gas contractors are already benefiting from increased rates as a result of the sector’s global recovery. Three key surveys have been published, which point to oil and gas contractors enjoying increased demand for their services in the UK and internationally:
- The Oil & Gas UK Activity Survey shows capital investment in the UK’s oil and gas exploration has increased by 60% in the last two years, which could significantly reverse the decline of the UK’s oil & gas assets
- The Oil & Gas UK Quarterly Business Confidence Index shows upstream sector confidence at the highest level since the survey began in 2009, with exploration and production companies actively investing in new capacity
- The Oil & Gas Global Salary Guide 2011 points to 10% to 20% increases in oil and gas contract rates and a vibrant and global demand for skilled oil and gas contractors.
According to Duncan Freer, managing director of Oil & Gas Global Salary Guide 2011 survey co-author Oil & Gas Job Search, confidence about future prospects in the oil & gas sector is rising: “A level of confidence has been restored to many of the global energy markets [and] a greater number of professionals are more optimistic about the future.”
Current protests in Libya, Oman and other oil-producing countries are likely to impact on the oil and gas sector globally. Whilst the near future is will remain unpredictable, it may well be the case that such unpredictability increases demand for contractors, as clients may be unwilling to commit to full-time employees.
Business spending drives improved fortunes for business services contractors
Contractors working in the business and professional services sector are benefiting from their clients’ modest increases in spending, according to the latest Confederation of British Industry (CBI) Service Sector Survey. Conversely, those contracting for consumer-facing clients have seen the value and volume of business fall for a full year, and may want to think about finding their next new client in the business-to-business sector.
“These findings on the service sector reveal much about the broader economy,” explains Ian McCafferty, CBI Chief Economic Adviser. “On the one hand, consumer spending is constrained, held back by rising prices and squeezed real incomes. On the other, there are signs that spending by businesses is picking up, helping to re-balance the economy away from consumer-driven growth.”
IT and engineering contractors are set to benefit from planned increases in IT, plant and machinery investment, particularly in the business-to-business sector, where firms are concerned that outdated systems and equipment might limit growth plans.