Contracting is maintaining its lead on the mainstream UK labour market: demand across the core disciplines of IT, engineering and construction is continuing to grow, and the number of IT workers in the UK, including contractors, has reached an all-time high. Serious imbalances are starting to appear based on occupation, sector and location; these could work to contractors’ advantage if they carefully select their target clients. Contractors may also find an unexpected market for their services from other micro businesses.
In this month’s ContractorCalculator Market Report:
- Online demand in the public sector plummets, but core contracting disciplines are the subject of increasing demand – July’s Monster Employment Index
- IT contractors are most likely to find new assignments with business services clients in the south, according to the Chartered Institute of Personnel and Development (CIPD)/KPMG Labour Market Outlook Summer 2011
- IT contractors and permies now top 1 million people, an all-time high. However, training and education in IT is well below the national average – e-skills Bulletin
- Contracting clients face a five-year countdown to an engineering and IT skills vacuum, according to research by the Institution of Engineering and Technology
- A survey by the British Chambers of Commerce (BCC) suggests that contractors have the opportunity to become the enablers of micro-business entrepreneurial growth, by offering much-needed skills on a flexible basis.
Online demand for core contracting disciplines bucks job market trends
Online demand for IT, engineering and construction and extraction sector contractors has bucked the trend of the overall jobs marketing in the UK. Despite year-on-year growth of 9%, July’s Monster Employment Index (MEI) fell by a single point from June’s index of 141, to 140.
Monster UK & Ireland spokesperson Michael Gentle is upbeat despite the fall: “The Monster Employment Index shows recruitment trends increasing steadily across the UK. This coincides with recent upward trends in industrial new orders.”
Despite the upswing in industrial activity, which has so clearly benefitted IT, engineering and construction contractors, online demand in the public sector has plummeted. The Index “indicates a sharp decline in public sector job opportunities as we see a 15% drop this month,” says Gentle.
IT roles in business services firms in the south are key contract market
Contractors looking for well-paid contracts should target business services firms in the south that are recruiting for IT assignments. This is according to the Chartered Institute of Personnel and Development/KPMG Labour Market Outlook Summer 2011. The report, which surveys over 1,000 HR professionals, forecasts that job creation in the business services sector will be particularly strong.
There is also a widening gap between the recruitment intentions of organisations in the north and south, with the latter 12% more likely to recruit than their northern counterparts. And the IT sector is set to enjoy the biggest pay increases this year – up to 4.3% – due to the difficulties in recruiting IT professionals.
As well as identifying potential opportunities for contractors, the report also highlights some potential threats. When asked to identify the biggest obstacles to jobs growth, 50% of respondents cited candidates lacking the right set of skills, while 40% were concerned about skills gaps/shortages.
And, despite the imminent arrival of the Agency Workers Regulations (AWR) in October 2011, 44% of the HR professionals participating in the survey feel that employment legislation facilitates jobs growth, against 25% who feel regulation is a barrier.
IT worker numbers top 1 million, an all-time high and 4% of the UK workforce
Total numbers of IT contractors and permies reached 1.093m at the end of 2010, an impressive 4% of the UK’s workforce. The e-skills Bulletin for the 4th Quarter of 2010 also shows demand for IT workers rose for the sixth consecutive quarter.
Although the Bulletin reports no skills shortages, demand across a range of specific IT contracting roles has remained strong over the long term. Business analysts and developers are in the greatest demand, closely followed by project managers.
Despite the highly technical nature of many IT roles, e-skills UK highlights that levels of training and education are relatively low. On average, only 21% of IT contractors underwent training or education in the fourth quarter of 2010 compared to 27% of UK workers as a whole.
As the UK’s sector skills council for IT and telecoms, e-skills UK is bound to focus on this topic. However, investment in training and education presents itself as an opportunity for IT contractors to differentiate themselves from employees and other contractors.
Contracting faces five-year countdown to engineering and IT skills vacuum
Contracting clients and employers will be unable to recruit the engineers and IT professionals they need in four to five years time because there will be a lack of suitably qualified candidates and specialist skills will be in short supply.
This is according to The Institution of Engineering and Technology’s (IET) Engineering and Technology Skills & Demand in Industry Annual Survey 2011, which also revealed that recruitment costs and pay won’t be the barrier to recruitment in the future.
Engineering firms are already experiencing difficulties recruiting. A quarter of those organisations surveyed are trying to recruit senior engineers but are having difficulties doing so. This presents engineering contractors with potential opportunities to fill these gaps.
The IET’s Head of Policy, Paul Davies, agrees that opportunities for qualified engineers abound, saying: “Our research clearly shows that there are opportunities out there for all engineers, particularly those with experience.”
Contractors offer flexible skills solutions for micro businesses seeking growth
Contractors are ideally placed to offer skills on a flexible basis to entrepreneurial micro businesses planning to grow. The Workforce Survey: Micro businesses August 2011 by the British Chambers of Commerce (BCC) shows that a quarter of the UK’s micro businesses want to grow, but find recruitment difficult and employment legislation ‘burdensome’.
For too many firms, burdensome employment legislation deters them from taking on staff in the first place
Dr Adam Marshall, BCC
Micro businesses, those with fewer than ten employees, make up a fifth of the UK’s private sector. But the BCC’s survey suggests few would consider taking on a school leaver or graduate and are looking for a safe and experienced pair of hands to assist with growth.
“Micro firms make up an important part of our economy, and the fact that over half want to increase staff numbers is good news,” explains BCC Director of Policy Dr Adam Marshall. “However, for those wanting to take on more staff, finding the right person for the job can prove difficult. And for too many firms, burdensome employment legislation deters them from taking on staff in the first place.”
Clearly, this presents contract opportunities as more micro businesses realise that they can attract the high levels of skills they require, and on an as-needed basis, by bringing in contractors.
Published: Tuesday, September 06, 2011
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