It’s a bit of a conundrum. Agencies and umbrellas are reporting that employers are hiring contractors with “a renewed sense of purpose”, yet the market in itself has shrunk for the second month in concession. So what’s to do in the temporary job arena?
One of the possible explanations for a fall off in contractor requirements is the coincidental rise in manufacturing in the UK.
Whilst engineering and IT sectors remain strongholds for bespoke short-term staff, long-serving workers on the factory floor have upped output for the second successive month.
Production figures reflect the demise of demand for contractors
The belief within the recruitment industry is that the slip back in demand for temporary staff is, in itself, only temporary.
Agencies are reporting that flexible staffing is still very much a part of their plan, especially in the north and the Midlands.
Conversely, reports from the Midlands by recruiters and agencies confirms three aspects about permanent staff that’s good for the economy, but does little suggest the growth in contractors’ awards that’s being hinted at.
Three key takeaways from the Recruitment & Employment Confederation report for April, Midlands:
- permanent placements in the Midlands rose at the fastest rate this year so far;
- indeed, April was the ninth consecutive month of permanent placements rising and you have to go back to September 2011 to find an equally sharp rise in fortunes for the region’s full time staff
- availability of permanent staff also rose. Does that mean some contractors have withdrew from the market to go on the books full time? Read on to continue that chain of thought.
- it would be understandable if so. The region recorded a sharp increase in permanent placement salaries, which may well have tempted agency staff to call time on freelancing and return to full PAYE direct
Midlands is only region to see both permanent and temporary staff demand rise
The Midlands scenario is different from the rest of the country, mind. As well as the incredible figures for permanent placements, temporary billing was also up, reflecting the growth in the area as a whole.
Conversely, London and the South of England continued their downwards spiral in contractor demand; the north, like the Midlands, recorded growth here.
This fits the pattern of recent times. However, the reason there’s not as much cheer in the north as in the heart of the UK boils down to the fact that permanent placements did not mirror the increase in contractor demand for the region.
Fears that upward trend for contractor demand could change
Overall, the contractor sector didn’t fair too badly, despite the localised losses. The only sector to show negative growth was the construction sector for contractors. Overall, especially engineering and IT, the results were positive.
Contractor availability grew in April, despite the demand easing.
Could it be that those skilled contractors whose expertise has suddenly come into demand have foregone the self-employed lifestyle to take permanent roles with employers direct?
If so, that suggests the remaining contractors available to work may not have the skills to win the contracts becoming available.
If employers struggle, despite their desire to hire on a temporary basis, they may be forced to take on full time staff and train them to the bespoke job requirements for their production needs.