Contractors are in demand both in the UK and globally. So much so that core contracting disciplines appear in ManpowerGroup’s list of top ten hardest to fill roles. The shortage of appropriately qualified contractors is resulting in falling billings for recruiters, according to the Recruitment and Employment Confederation (REC) and KPMG. A surge in investment and activity in the UK’s oil and gas sector is causing some clients to pressure contractors to become employees. And if shale gas development reaches it potential, the Institute of Directors is predicting that 74,000 new contracts and jobs will be created, many in core contractor markets.
In this month’s ContractorCalculator market report:
- The latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs shows an emerging mismatch between client demand and the availability of suitably skilled contractors
- Demand for oil and gas contractors is forecast to rise by 20% over the next 12 months, worsening the existing skills shortage in the sector, highlights the 18th Aberdeen and Grampian Chamber of Commerce Oil and Gas survey
- Strong performance in consumer services and upbeat predictions of future business in business and professional services bodes well for contractors, says the CBI’s Services Sector Survey
- Up to 74,000 new contracts and jobs could be created directly as a result of the development of shale gas, with further contracts created in the supply chain, forecasts the Institute of Directors (IoD)
- Several core contracting disciplines are in ManpowerGroup’s global top ten roles hardest to fill, and clients are urged by the recruiter to use more contractors to tackle talent shortages.
Contractor demand in engineering and IT sustained during April
IT and engineering contractor demand remained strong during April despite a general softening of the temporary labour market, with agency billings falling for the first time in nine months. Accounting and financial contractors were also in demand, outperforming IT to rise to third place in the demand league table, after nursing/medical care and engineering.
This is according to the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, which also showed a sharp fall in demand for construction contractors, the only core contracting discipline to be in negative growth territory.
Despite the falling billings, REC chief executive Kevin Green remains upbeat: “Recruiters are reporting a renewed sense of purpose from their clients, with employers making hiring decisions more quickly than before. Highly skilled jobs like engineering and IT are still big growth areas.”
The modest rise in contractor availability, together with the sustained demand and decline in agency billings, confirms other reports of an emerging skills mismatch, with not enough contractors with the right skills to fill available contracts.
Oil and gas contractor demand forecast to rise by 20% during 2013
Oil and gas contractor demand is forecast to rise by 20% during 2013, which is likely to lead to skills shortages in an already skills-starved sector. The 18th Aberdeen and Grampian Chamber of Commerce Oil and Gas survey highlights that 40% of energy firm operators and 66% of service and support contracting companies have staff shortages.
Recruiters are reporting a renewed sense of purpose from their clients, with employers making hiring decisions more quickly than before. Highly skilled jobs like engineering and IT are still big growth areas
Kevin Green, REC
As a result, and to hoard increasingly scare skills and capabilities, some clients have been pressuring their contractors to become permanent employees. Bond Dickinson oil and gas partner Kenny Paton explains: “The survey shows rising employment and the continuing skills shortage is a key factor in driving companies to retain people by making them permanent employees, rather than contract staff.”
Despite increasingly damaging skills shortages that threaten to constrain activity, the UK’s oil and gas industry is showing record levels of investment and rising levels of business confidence, with three-quarters of operators and services firms operating at or above optimum levels.
Contractor prospects boosted by rising optimism in services sector
A sharp rise in consumer services business volumes and rising optimism in the business and professional services sector may lead to an increase in new and renewed contracts in the coming quarter.
The Confederation of British Industry’s (CBI) Service Sector Survey also shows that consumer services firms plan “modestly positive” spending, while professional and business services firms are committed to “a little extra spend” on IT.
“There appears to be a sense of growing confidence in the service sector. We’ve seen some turnaround in activity this quarter, and a more positive outlook for the next,” says CBI director of economics Stephen Gifford. “While activity has been pretty flat for business and professional firms, the outlook is much stronger.”
Contractors to benefit from new shale gas development
Contractors look set to benefit from up to 74,000 new contracts and jobs that the Institute of Directors (IoD) predicts will be created as a result of shale gas development. The Getting shale gas working report identifies core contracting disciplines as those most likely to benefit, such as “geologists, engineers, construction workers, business analysts…and public relations staff”.
The report’s author, the IoD’s senior economic adviser Corin Taylor, likens the onshore shale gas potential to offshore oil and gas: “Shale gas could be a new North Sea for Britain, creating tens of thousands of jobs, supporting our manufacturers and reducing gas imports.”
Further contracts are likely to be generated in the supply chain, which includes contractor clients such as “cement and steel manufacturers, equipment manufacturers, drilling services companies and water treatment specialists”.
Despite the potential of shale gas, the report warns that its development is facing considerable barriers; these come in the form of poorly coordinated government strategy and guidance, together with bureaucratic barriers, such as the tough planning and permitting regime.
Core contracting disciplines in global top ten of hardest to fill roles
IT, engineering, accountancy, finance and interim management are among ManpowerGroup’s top ten of hardest to fill roles. In its Annual Talent Shortage Survey, the recruiter identifies those assignments that clients are finding it hardest to fill, and shows that 13% of UK firms can recruit the people they need, versus a global average of 35%.
In the UK, engineers are in second place after skilled trades workers, with interim managers in sixth place ahead of IT. The notable exception is accountancy and finance, which appears in the global top ten but not in the UK’s.
Talent shortages are having a grave impact on UK client organisations and employers. They cite “reduced ability to service clients”, “reduced competitiveness and productivity” and “reduced innovation and creativity” as the results of talent shortages.
ManpowerGroup offers a range of strategies to help client and employer organisations to meet their talent shortage challenges. These include using flexible workers, such as contractors, whose use is “increasingly the norm”.