Contractor demand grew further during December 2013, with contractor agency billings growing at the “sharpest in over 15 years”. This is according to the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, which also shows that IT & computing posted the fastest growth during the month.
Despite the climb in agency billings, the increasing demand from clients for contractors has resulted in another month of falling contractor availability and rising rates, indicative of skills shortages.
“Increasing demand for temp workers has driven up hourly pay rates for agency workers for the eleventh month on the trot,” notes REC’s head of policy Kate Shoesmith. “Growing confidence means more and more employers are willing to invest in their workforce and take on more people.”
But KPMG’s partner and head of business services Bernard Brown warns that skills shortages could derail the recovery: “Some uncertainty still remains because the availability of staff to fill roles has seen a steep fall – the biggest for almost ten years.”
He believes that there is a very real risk that clients and employers desperate to fill skills gaps “could become stretched beyond their means at the same time as over-inflating the market by offering high salaries just to tempt employees to move”.
Each of the core contracting disciplines of IT, engineering, construction, finance and interim was well into growth territory during the month, with accounting and financial shooting into third place in the demand league table, after nursing/medical/care in second place.
However, the number of specific skill sets noted by recruiters as being particularly hard to source is increasing, particularly in IT. Business intelligence, digital marketing and web developer skills are in short supply, alongside process design and analysis in engineering.
Shoesmith highlights the problems facing contractor clients: “The real concern now is the mismatch between demand and supply, with recruiters reporting that they can’t source suitable candidates for vacancies in a whole range of sectors.
“Companies want to hire more salespeople, accountants and businesses development staff to help their enterprises grow, but can’t find people with the right skills to take the jobs.”
Fresh waves of austerity measures may also be starting to take their toll on public sector hiring, yet this is working in favour of contractors. Pressure to maintain service levels whist reducing headcount has led to stagnating permanent employee demand and rising contractor demand across the public sector.