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Contract opportunities increase as clients use contractors to fill skills shortages

Contractor demand and contract opportunities continued to increase during August 2014. Client organisations are turning to the UK’s flexible workforce to fill strategic skills gaps because there are not enough suitably qualified permanent employees available.

This is according to the latest Recruitment and Employment Confederation (REC) JobsOutlook, which also shows that nine out of ten clients are satisfied with the quality of contractors they are hiring.

“It’s clear that skills shortages are affecting the way in which employers use agency workers and increasing numbers are now relying on temporary staff to provide short-term access to strategic skills,” highlights REC CEO Kevin Green.

Green believes that demand for contractors will continue to rise alongside economic growth: “This is a trend that is likely to continue as it becomes increasingly difficult to source the skilled permanent staff that businesses need to grow.”

The report suggests that this focus on hiring contractors for their strategic skills, rather than for capacity management or to cover permanent staff absences, is likely to impact on the dynamics of contractor skills profiles required and contract lengths.

There has also been a major shift in the trend of contractors choosing to become employees. In November 2013, 91% of clients reported that they saw at least one contractor they hired become an employee.

By August 2014, the number of clients reporting contractor to permanent conversions had nearly halved, to 55%.

To explain this sharp fall in temp to perm, the report says: “Employers’ clear articulation of ‘short-term access to key strategic skills’ is contributing to this shift. Worker preference is also coming into play. Both will be contributors to this trend.”

Clients are finding that technical and engineering contractors are hardest to source. The JobsOutlook forecasts that this shortage of skilled candidates is forecast to extend into the professional and managerial sector during the third quarter of 2014.

Future demand growth, where contractors may find more contract opportunities, is anticipated for contract engineers, professionals and sales personnel.

In terms of client business size, the report suggests contractors should be targeting large businesses as the greatest consumer of contractor services, followed by small firms and then medium-sized companies.

Published: 24 September 2014

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