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Contractor skills shortages worsen, driving up rates in core contracting disciplines

Contractor skills shortages worsened during March 2015, as candidate availability “deteriorated at the fastest pace since last October”, shows the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs.

The result has been an increase in rates of pay across the core contracting disciplines, but commentators fear skills shortages could undermine the UK’s economic recovery.

“Recruiters are struggling with industry-wide skills shortages, as demand for talent continues to outstrip the number of candidates seeking work,” notes Bernard Brown, partner and head of business services at KPMG. “This pervasive skills shortage could put the brakes on economic growth if it continues unabated.”

REC chief executive Kevin Green believes that growing public sector skills shortages could also have negative economic impact: “We have acute shortages in the public sector, with recruiters reporting that teachers and healthcare workers are hard to find both for permanent and temporary vacancies.

“As politicians debate skills, education and immigration in the run up to the election, we hope they recognise the potential impact of this skills crisis, because a lack of workers to meet demand threatens the sustainability of our economic growth.”

ContractorCalculator CEO Dave Chaplin highlights that these skills shortages mean that now is a good time for permanent employees stuck in jobs who see new starters earning much higher salaries to consider becoming a contractor.

He explains: “For permanent employees with transferable skills in areas such IT, engineering, construction, marketing and finance, the acute skills shortages in these core contracting disciplines mean that there is a steady stream of contracts available to provide stability during those first few months of a contracting career.

“There is increasing evidence that organisations are filling talent gaps with contractors while seeking suitable long-term candidates, but that those candidates just aren’t out there. This is providing contractors who can spot these opportunities with extended contracts at good rates of pay.”

The report shows that all the core contracting disciplines showed strong demand growth during March. Construction and engineering were in fifth and sixth place respectively in the demand league table, followed by accounting/financial in seventh and IT/computing in eighth.

Despite being last in the demand league table, demand growth for interims and the executive/professional category was markedly higher than in February.

Published: 13 April 2015

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