Contractors who have key skills in engineering, strategic and technical areas are seeing greatest demand.
The next year or two look like being profitable ones for technical contractors, engineering contractors and contractors in possession of important strategic skills according to new REC figures. The REC (Recruitment and Employment Confederation) Jobs Outlook for August highlighted the fact that 82% of clients were using contractors (and planned to use contractors in the coming year) in order to ‘provide short-term access to key strategic skills.’ This was by far the ‘dominant reason’ that employers were accessing contractors according to the Outlook. Of the clients surveyed, one in four predicted a shortage of technical and engineering contractors and they were also worried about the likely lack of contractors with managerial and professional skills.
Talking about the most recent Jobs Outlook report Dave Chaplin of Contractor Calculator noted that it once again highlighted the ‘value of the contracting sector to UK plc’ and (with a sly dig at the latest government legislation to affect contractors) that:
“Contractors are not ‘disguised employees’ but a valuable resource of strategic skills that are called upon as needed by clients who don’t need or can’t afford these skills full-time.”
This was highlighted by the report, which revealed that demand for contractors was as high as ever. Clients had been using contractors more than ever and planned to carry on doing so over the next year or two. In the short term, of those surveyed, 43% planned to take on more contractors over the next three or four months. In the longer term, 44% of employers planned on adding to their contractor numbers over the coming year. Predictably it was still the larger organisations and big businesses who used contractors the most, but interestingly the report also revealed that there were an increasing number of small to medium sized businesses who have ‘registered their intent to hire’ contractors in the coming year. This, of course will add to the pressure on contractor numbers and they might face difficulty in sourcing suitably qualified candidates.
Of course, with such across-the-board demand the prospects for contractors are looking good for 2014/15 and a rise in rates is inevitable. This is highlighted by the report which notes that with ‘access to key strategic skills being the battleground, hirers will increasingly have to reconsider the attractiveness of their offering to agency workers.’ The pressure on hirers is all the more acute when considering the fact that one third of those clients now have no availability / capacity for any new work that comes from – a figure that has risen by a quarter since the start of 2014. It is easy to see then why these clients are now turning more regularly to freelancers and contractors in order to get access to much needed technical and strategic skills.
Finally, the REC report also revealed that for the 8th month in a row there was a fall in the number of contractors who switched to permanent work. The reason for the constant fall in ‘term-to-perm’ numbers is likely to be that contractors are these days more likely to view contracting as a long term career option rather than a temporary career stopgap. Indeed as the report points out, it is likely that “the desire for short term rather than permanent access to key strategic skills that has reduced client pressure on contractors to choose employment.”