Contractor demand continued to increase during April 2014, but the availability of candidates for new contracts fell at the sharpest pace since 2000.
This is according to April 2014's Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, which also highlights concerns over the impact of skills shortages on the UK labour market's recovery.
Dave Chaplin, ContractorCalculator CEO says: “This shift in supply and demand is good news for contractors in the short-term, allowing them the luxury of choosing the contracts they are most interested in, and driving up rates.
“But the shortage of key skills in the UK, compounded by the government making it very difficult for clients to bring in non-UK-based contractors with the skills they need, could provide major employers with reasons either to offshore their contracts or potentially even shift their entire operations outside the UK.”
REC CEO Kevin Green is also concerned: "The jobs market could be jeopardised with thousands of employers not able to find the skills and talent they need to meet increasing demand. The number of candidates available to fill both temporary and permanent jobs is falling at its fastest rate in a decade."
Green highlights that employers are adopting strategies to tempt contractors onto the payroll to fill their skills shortages: "Employers are bumping up starting salaries to entice workers they need to join them. This dearth of skilled workers means that many organisations will need to improve their candidate experience and also look overseas to find people."
KPMG's partner and head of business services Bernard Brown agrees, adding: "The number of people putting themselves on the jobs market has dropped at its sharpest rate since 2004.It is this shortage of skilled labour that is forcing employers to tempt talent with improved pay, rather than new-found confidence."
Contractor availability fell for the tenth consecutive month, with the decline reaching its fastest rate since December 2000. According to recruiters, lack of contractor candidate availability was most pronounced in London and the south, where the UK's IT contracting sector is focused. Engineers of all kinds, business intelligence, developers, business development and legal were just some of the skills contractor recruiters noted were in short supply.
Engineering was first in the contractor demand league table, with construction in fourth place and the three remaining core contracting disciplines – IT & computing, accounting/financial and executive/professional – in fifth, eighth and ninth places respectively.
In line with other recent labour market reports, it was the Midlands that experienced the greatest level of contractor-related activity during the month. Contractor agency billings were strongest in the Midlands during April.