Contracting demand increased for the nineteenth consecutive month in March, with engineering and construction contractors topping the demand table, closely followed by IT contractors, according to the March Report on Jobs from the Recruitment and Employment Confederation (REC) and KPMG.
The report reveals that a two-speed labour market is emerging, with the private sector creating jobs and hiring contractors and temps, while the public sector is shedding workers. The decline in short-term staff hiring highlighted in the report is being blamed by recruiters on public sector spending cuts, although this has not adversely impacted on core contracting disciplines, where growth has been maintained.
Contractor and temp vacancies are at their highest level since July 2007, representing an unbroken nineteen-month run of increases in demand. In contrast, growth in the availability of contractors has reached a seven-month low, and skills shortages in engineering and IT are starting to appear. However, this has yet to impact on pay rates, as growth remains subdued.
Conversely, in the permanent employment sector, a shortage of IT, engineering and finance candidates has prompted an increase in pay, suggesting that for contractors thinking of switching to permanent employment, now might be a good time to make the move.
For the first time since September 2008, full-time employment has returned to growth, and the decline in part-time employment growth continues. It is possible that this reversal might signal a downturn in contractor and temp worker demand, as clients are sufficiently confident in future economic recovery to hire full-time permanent employees. However, there is no evidence to suggest this is the case at the moment.
Self-employment has risen steadily over the last 18 months, probably encouraged by redundant and laid-off workers choosing to start a business. According to the report, this trend appears to be accelerating, as January saw a 2.9% increase in self-employment.
Summarising the report, Kevin Green, REC Chief Executive, explains: “The jobs market is still growing, but at a slower rate than in February. The report again highlights that the UK has a two-speed labour market with the private sector creating jobs as the public sector reduces employment.”