Contractor demand softened for the second month running according to the March 2013 Recruitment and Employment Confederation (REC) Report on Jobs, although all core contracting disciplines remained in growth territory.
In contrast, the BDO Employment Index rose to 96 in March, up from 95 in February. This small increase is significant, because for the first time since August 2011 private sector firms are predicting that hiring will increase in the second quarter of 2013.
“It is encouraging to see improvement in UK businesses’ hiring intentions, particularly in light of the imminent public sector payroll cuts, which will add pressure to the unemployment rate,” notes BDO partner Peter Hemington.
However, on the softening contractor market, REC chief executive Kevin Green highlights that skills shortages are partly to blame: “Recruiters report that businesses are willing to pay…to get the right talent, but are struggling to find people with the right skills and experience. It’s a worrying trend that is particularly problematic across IT and engineering and at senior levels in other sectors.”
The Report on Jobs shows engineering and construction moving up to second place in the demand league tables, knocking accounting and financial from second place in February to third in March.
In line with Green’s comments, recruiters are finding it increasingly difficult to hire engineering contractors from a widening range of engineering sub-disciplines. These include medical, nuclear, oil and gas, power, utilities and structural engineers.
IT & computing remains in fourth place for the second consecutive month, with growth in the sector slowing marginally in March. The executive and professional sector moves up from eighth to seventh place, but demand for interims slowed during March.
Demand for contractors in the public sector increased for the first time in three months. A separate report by ManpowerGroup suggested that public sector contractor demand is likely to increase, as a result of ‘over firing’ by public sector managers who now need skilled workers to maintain public sector service levels. This month’s Report on Jobs confirms this phenomenon may be gaining traction.