Contractor clients are adopting strategies to tempt contractors into permanent employment, at the same time increasingly using contractors to fill talent gaps. These are just two of the conclusions from this month’s market report, which also highlights that shale gas development presents a huge opportunity for all contractors – if only the industry could get going. Skills shortages in Scotland are particularly acute, and there are simply not enough suitably skilled and experienced contractors to fulfil current demand, presenting opportunities for contractors elsewhere in the UK willing to relocate.
In this month’s ContractorCalculator market report:
- Contracting market dynamics shown by the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs suggest that clients are trying to tempt contractors into permanent employment
- Contractors across multiple core contracting disciplines are benefitting from the ongoing recovery of London’s financial sector, highlights the latest Morgan McKinley London Employment Monitor
- The Bank of Scotland Report on Jobs for March 2014 identifies that there are not enough contractors to fill the increasing number of contract vacancies
- Contractors with technical, engineering and IT skills remain in great demand, reports April 2014’s REC JobsOutlook, as contractors are increasingly used to fill talent shortages
- A new report commissioned by the UK Onshore Operators Group (UKOOG) and authored by EY forecasts that 64,000 new contracts and jobs could be created as a result of shale gas development.
Contractor demand on the increase, but so is clients’ demand for employees
Contractor demand continued to increase during March 2014, but the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs shows clients are trying to attract permanent employees to provide long-term solutions to their skills needs.
The combination of slowing growth in contractors’ rates, increasing skills shortages and salary growth of employees rising at its fastest rate since July 2007 suggests that skills-hungry clients are trying to tempt contractors into permanent roles.
ContractorCalculator CEO Dave Chaplin believes that ‘natural permies’ may also be returning to full-time work: “It’s possible that the slowdown in rate rises for contractors is being driven by some who were forced into contracting due to the recession but are now going back to the perceived comfort zone of permanent employment.”
Contractors across disciplines benefit from City’s contract surge
IT, human resources (HR), compliance and risk specialist contractors are benefitting from a surge in contract and job vacancies in London’s financial district. This is according to March 2014’s Morgan McKinley London Employment Monitor, which also shows vacancies rising by 10% between February and March.
“Whilst much of the past year has seen demand within the contract jobs market, recent data shows that this is now beginning to stabilise,” highlights Morgan McKinley Financial Services’ operations director Hakan Enver. “We are, however, seeing a few exceptions to the rule in areas that traditionally rely on flexible labour – IT, HR, compliance and risk.”
IT contractor fortunes directly rely on the UK’s financial sector, as the software development business is the only sector which hires more. Overall, the report’s conclusions are that the financial IT contract market is growing, alongside the market for specialist contractors in finance and accounting.
Contract opportunities in Scotland, as market hots up due to lack of contractors
Contractors based in Scotland – or willing to relocate – have an increasing number of opportunities in Scotland, as candidate numbers drop and contract vacancies increase.
The Bank of Scotland Report on Jobs for March shows rates continuing to rise, with contractor availability dropping at its fastest rate since October 2014. This combination of market factors suggests that there are not enough suitably skilled contractors available to fill all of the assignments Scotland’s clients are creating.
“The number of people appointed to jobs increased, accompanied by a strong rise in job vacancies during the month,” says Bank of Scotland Chief Economist Donald MacRae in response to the survey’s findings.
These market conditions provide an ideal opportunity for contractors throughout the wider UK willing to relocate to take advantage of the contractor shortages.
Clients are looking to the UK’s flexible workforce for skills and capacity solutions
Contractor clients are looking to the UK’s flexible workers to fulfil their need for specialist strategic skills and to help manage growth capacity. The April 2014 JobsOutlook from the Recruitment and Employment Confederation (REC) also highlights that 50% of clients plan to increase contractor headcounts over the next three months.
As scarcity of skills continues to be an issue in key sectors like IT, engineering and logistics, contractors, interim managers and agency workers are becoming more important than ever to help businesses quickly access the skills they need to stay competitive
Kevin Green, REC
“Being able to access high quality flexible staff to meet variations in demand has been vital to British businesses during the downturn,” notes REC chief executive Kevin Green. “Now we see that the majority of employers who are using flexible resource are doing so to fill talent shortages.”
Contractor clients continue to be affected by core contracting skills shortages. The report notes: “From a front-line perspective, it is the need for technical, engineering and IT skills that are consistently at the fore.”
“As scarcity of skills continues to be an issue in key sectors like IT, engineering and logistics, contractors,” continues Green, “interim managers and agency workers are becoming more important than ever to help businesses quickly access the skills they need to stay competitive.”
Contractors across multiple disciplines will benefit from shale gas developments
Contractors across all the core contracting disciplines, including oil and gas/energy, engineering and construction, look set to benefit from shale gas development.
A report commissioned by the UK Onshore Operators Group (UKOOG) and authored by EY, Getting ready for shale gas, estimates that an additional 64,000 new jobs and contracts will be generated as a result of shale gas development over the next 18 years.
The report details the investment, supply chain and skills requirements needed to create a shale gas drilling ‘pad’, which will require input from a range of contractors with skills in oil and gas, engineering and construction.
The supply chain is also likely to generate contracts indirectly for other types of contractors, such as those with IT, interim management, finance, HR and marketing skills.