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Contractor prospects improve as clients seek capacity to gain from growing economy

Contractors are experiencing a wave of new business from clients keen to take advantage of improving UK market conditions to grow their own businesses.

The Recruitment and Employment Confederation’s (REC) JobsOutlook for November 2015 shows that almost four in five (79%) businesses consider economic conditions to be improving. This sustained wave of optimism looks set to translate into further demand for contractors, with 91% of organisations expecting either static or improved hiring prospects as a result.

Meanwhile, the ongoing war for talent continues to play into contractors’ advantage. The report highlights that almost half of businesses have introduced rate increases over the past 12 months to stay competitive.

“Skilled people are at a premium and organisations across the economy are having to pay more to attract and retain staff,” notes REC chief executive Kevin Green.

Over the next three months, 43% of organisations surveyed expect to increase their contractor headcount, with 56% planning to maintain numbers. Significantly, only 1% expect to reduce their contractor numbers. Medium-term prospects are almost identical.

Contractors in the engineering (13%) and construction (12%) sectors can expect substantial demand for their services, as they made up two of the top three spots when clients were asked where they most expected to see a shortfall in contractor supply.

Meanwhile, statistics reveal a marked increase in the anticipated demand for finance contractors over the next three months, rising just short of 150%, while demand for contractors with industrial skills has risen to 180%.

“The statistics show that the contingent workforce can play a pivotal role in the continued growth of the economy. As long as businesses continue to see potential for further growth, contractors shouldn’t find themselves short of new contract opportunities,” highlights ContractorCalculator CEO Dave Chaplin.

The expected rise in demand comes in spite of the acknowledgement by 92% of businesses that they are currently operating with limited capacity for growth, emphasising the tangible benefits that contractors can offer clients.

This value is underlined by further statistics, showing that 88% of clients engage with contractors in order to gain short-term access to key strategic skills. Meanwhile, 63% highlight the benefits on contractors in terms of responding to growth whilst 56% note the cost-effectiveness of hiring a contractor.

It is equally economically viable for the contractors themselves, with 43% of clients reporting that contractors who they hire earn more than their permanent equivalent, while 52% state that temporary staff earn an equal amount to employees.

Another notable endorsement for the contingent workforce comes via candidate satisfaction statistics. Almost nine in ten (89%) businesses expressed satisfaction with the contractors supplied to them.

Published: 24 November 2015

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