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Contractor candidate shortages worsen, impacting on key infrastructure projects

Contractor candidate shortages persisted during September 2015. Skills shortages in engineering and construction are now so acute that it is feared major infrastructure and housebuilding projects may suffer.

But although the Recruitment and Employment Confederation (REC) and KPMG Report on Jobs for September 2015 appears to paint a bleak picture, this means a contract-rich environment exists for contractors across all the core contracting disciplines.

“Talent shortages are making it increasingly difficult for employers to find quality candidates,” warns REC chief executive Kevin Green. “This is now at a critical stage in the construction and engineering sectors, constituting a major threat to planned rail upgrades and housebuilding projects.”

“Contractors who are having difficulty finding contracts may need to look further afield, as the demand for their services exists if there are available candidates for agencies and clients to hire,” notes ContractorCalculator CEO Dave Chaplin.

Contractor agency billing growth did continue throughout the month but at the weakest rate seen since May 2013. This is largely attributed to skills shortages, as KPMG Partner Bernard Brown explains: “The pool of available skilled labour shrank yet further in September, dampening growth of both permanent and temporary placements.”

There is good news for contractors in the accounting/financial sector, which maintained a strong position in the contractor demand table, coming in second. With this sector reporting the biggest shortfall in temporary candidates, it comes as little surprise that London-based agencies reported the steepest deterioration in contractor availability, suggesting that there may be opportunities for contingent staff looking for contracts in this sector.

Meanwhile, with the construction sector enjoying a boom in activity, as highlighted by the Markit/CIPS UK Construction PMI, clients in the sector are adopting a skills hoarding strategy and focusing on permanent hires. As a result, demand for contractors in the sector has fallen, resulting in the sector coming in eighth in the contractor demand table. Engineering and IT & computing came in fourth and sixth respectively.

Geographically, the Midlands is looking like an increasingly promising area for contractors to source work. The region recorded the fastest growth in terms of both contractor agency bookings and contractor pay rates.

Published: 08 October 2015

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