Contractor prospects are looking cautiously optimistic over the next 12 months, with demand for contractors in the core contracting disciplines forecast to increase due to rising consumer confidence and skills shortages.
This is according to the Recruitment and Employment Confederation (REC) JobsOutlook for June, which also highlights that a fifth of clients are hiring fewer contractors for shorter assignments because of the Agency Workers Regulations (AWR).
“Consumer confidence is rising slowly, and the impact of that should filter through to businesses in a few months,” says REC Director of Research Roger Tweedy. Commenting on the lessons of the survey, which asks a panel of contractor clients about their hiring intentions, he adds: “Barring any terrible shocks from the eurozone…we could still be on track for slow improvements in job creation as time progresses.”
The engineering and technical and technology sectors, which include IT, engineering, energy and oil & gas contractors, are forecast by clients to see the greatest demand for workers both over the next quarter and in the next 12 months.
Asked about which skills they predict will be in short supply over the next 12 months, clients highlighted the following sectors:
- Professional, managerial
- Computing, IT, telecoms
- Technical, engineering.
The professional and managerial sector tops the contractor skills shortage league table because of “organisations looking to manage the continuing economic challenges”, according to the report.
Despite the positive news for contractors, the latest REC analysis of the impact of AWR suggests demand for contractors would be higher were it not for the new legislation. Half of clients have changed their patterns of contractor use since October 2011 when AWR came into force; 21% have actually cut contractor numbers; and a further 20% have stopped using agencies to engage contractors directly.
But the rate of contractors moving from ‘temp to perm’ has fallen, believed by the REC’s Report on Jobs to be driven by contract workers moving onto the payroll after the AWR’s 12-week qualifying period. According to the report, this fall in temp-to-perm hiring may be because: “...employers have decided that all forms of workforce expansion should stay on hold until the future is clearer.”