Contractors with the right skills are in the enviable position of not only being in great demand, but also playing a strategic role within their clients’ organisations. There are increasing skills shortages that present broader opportunities for contractors throughout the UK for those that are prepared to relocate for work. Scotland’s dual video games and oil and gas capitals stand out as hotbeds of contractor opportunity.
In this month’s ContractorCalculator Market Report:
- Contractor vacancies outpace permanent worker demand, providing contractors with greater opportunities, says the Recruitment and Employment Confederation (REC)/KPMG Report on Jobs
- The Bank of Scotland Report on Jobs highlights that Aberdeen’s oil and gas industry and Dundee’s video game development centre dominates contractor opportunities in Scotland during September 2014
- Contractor supply is worsening, with professional and managerial and technical and engineering contractors in short supply, shows the latest REC JobsOutlook
- Contractors provide increased capacity and specialist skills to contracting clients that are adopting lean workforce strategies, reports the REC Recruitment Industry Trends Survey 2013/14
- Contractors incorporate limited companies mainly to reduce risk, according to new research by HMRC.
Contracting dominates the UK labour market
Contracting is outperforming the rest of the UK labour market says latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, as contractor demand and agency billings outpace the performance of the permanent recruitment sector. Contractor pay rates have increased to a seven-year high and contractor availability has fallen sharply.
“The increasing lack of candidates continues to be a worry as shortages spread across more industries,” says REC chief executive Kevin Green. “It’s not just engineers and IT specialists that recruiters are finding it hard to source.”
Recruiters have identified that accounting and finance, construction, engineering and IT contract skills are in short supply. “Hourly pay for people on temporary contracts has risen at the fastest pace for nearly seven years,” notes Green, “which shows that employers are bringing in temps and contractors with the skills they need quickly and are willing to pay to do so.”
Scotland’s contractor demand driven by the oil and gas and video games sectors
Scotland’s contractor opportunities during September 2014 have been driven by rising demand from Aberdeen’s oil and gas industry and contractor shortages in Dundee’s video game sector. This is according to the latest Bank of Scotland Report on Jobs for September 2014.
“Two of the three main contractor centres of excellence in Scotland, oil and gas and video games, are performing strongly,” highlights Dave Chaplin, CEO of ContractorCalculator. “These sectors offer opportunities to contractors throughout the UK, as there are not enough suitably skilled local candidates to meet demand.”
The increasing lack of candidates continues to be a worry as shortages spread across more industries
Kevin Green, REC
The core contracting disciplines of IT & computing and engineering & construction occupy second and third place in the demand league tables. A slight slowdown of activity in Scotland’s financial sector has led to the Accounts & financial sector falling to sixth place.
Technical and engineering contractors in short supply, reports JobsOutlook
Technical and engineering contractors and interim management contractors have been the hardest to recruit during the third quarter of 2014 says the latest Recruitment and Employment Confederation (REC) JobsOutlook. This suggests that contractors with these hard to source skills will have the greatest contract opportunities in the coming months.
“The UK’s workforce is lean with minimal spare capacity and growing shortages of workers with the skills to fill the jobs that are currently available,” explains REC CEO Kevin Green. “As employers compete more intensely in the jobs market for the skills they need to grow there will be upward pressure on salaries in the months ahead.”
The JobsOutlook also highlights that capacity levels within contractor clients are worsening. Across contractor clients’ wider workforces, a lack of available capacity is increasingly jeopardising some employers’ ability to meet November and December’s additional demand for their goods and services.
Contractors offer clients increased capacity and specialist skills
Contractors enable ‘lean’ workforce strategies that have emerged following the recession, delivering expanded capacity and access to specialist and strategic skills to contracting clients.
So says the Recruitment and Employment Confederation’s (REC) Recruitment Industry Trends Survey 2013/14. Skills shortages are worsening, and demand for core contracting skills has reached the point the permanent employees could benefit from choosing to go contracting.
The REC highlights that: “Employers are waking up to the benefits of keeping their core workforces lean and then flexing when they have peaks in demand or they require new specialist skills. On any given day during the past year, 1.15 million people were working on a temporary or contract assignment they secured via a recruitment agency.”
Contractors incorporate mainly to reduce risk, shows HMRC research
Limited company contractors incorporate their business to manage risk and to benefit from tax and National Insurance Contributions savings (NICs). Other reasons include meeting contract obligations and enhancing credibility.
This is according to new research by HMRC, HMRC Research Report 317 – Reasons behind incorporation. Despite the recession, the number of new companies incorporated in the UK “has risen progressively since 2008”.
HMRC suggests that: “Possible reasons for this increase in incorporations could include changes to the structure of the labour market and a number of recent policy changes regarding corporation tax.”
The report also shows that for those respondents who highlighted tax and NI savings as a reason for incorporation, the “initial incorporation idea was often motivated by different business reasons and the potential tax/NI benefits were not apparent until after incorporation”.