Contract vacancies in the professional sector continue to grow. In the last year, APSCo‘s latest figures suggest by 9% overall. While recruitment agencies back this up, they also foresee a downside.
The number of skilled contractors on their books to fill these vacancies is getting thin. The economy is growing, but it’s still tentative.
Long term confidence is far from assured, meaning clients want work done, but cannot commit to permanent roles. On the face of it, this is the ideal scenario for freelancers and contractors geared up to work short- to mid-term contracts.
But will employers see this as a long term strategy if the roles they post remain unfulfilled?
Which industries are generating new employment?
In the small business manifesto, the government commits to supporting self-employment. Ann Swain, APSCo’s CEO, believes that such commitment has had a positive impact on clients’ attitudes toward temporary solutions.
This is reflected in the growth of ‘professional’ industries:
- in the financial sector, APSCo reports 10% more vacancies this year compared to last;
- marketing roles reflect the overall rise, with 9% more vacancies year-on-year;
- and both the IT and engineering sectors are more than double, showing an increase in vacancies of 20%.
The REC-ing ball
As the government’s new cabinet finds its feet, REC has pledged its allegiance to them. They want and need to work with the government to ensure continuity.
Recruitment agencies across the UK place >600,000 people in permanent roles every year. On top of that, they account for 1.15M freelancers working in temporary positions.
Kevin Green, CEO of REC, has acknowledged that the government’s pledge to grow the economy coupled with companies looking to recruit seem like a good match.
But he also points out that there could be a “looming jobs crisis” if the government doesn’t act soon.
At the end of April, the REC/KPMG jobs report does more than hint at this situation. If the report wasn’t enough, feedback from recruiters on the front line have pitched in with their take on the foreseeable problems.
For 2½ years straight, month-on-month figures show more and more people placed into work. The number of jobs posted by clients has, as you’d expect, risen in tandem.
But the number of available staff to fill these roles is moving in the opposite direction. Four in ten recruiters say that every month, the pool of qualified workers they have to choose from is diminishing.
What can the government do to sustain economic growth?
Mr Cameron need to address two clear barriers that could compound the situation.
Part of the Conservative manifesto seeks to cut down on the immigrant workforce. In an ideal world, where the economy had time to train native workers in the desired skills, this would make absolute sense.
But the fact is, the gap in skills could well impact before the apprenticeships the government has committed to come to fruition. In order to sustain economic growth, the government may well be dependent on non-native workers to fill the roles.
The other worrying element is the hard line the government is taking on benefits for umbrella workers. Namely, the travel benefits the government is hoping to cut in 2016.
Not everyone who likes the idea of contracting wants to form a limited company. They may want to use umbrella contracting to test the contracting lifestyle, or as a springboard for changing careers.
By cutting the proposed benefits, potential independent professionals may get the impression that working for themselves is just not worth it. This is the complete opposite of what the government and the UK economy needs right now.
Let’s hope there’s a rethink of policy and everything in their power is done to encourage entrepreneurship. That is, after all, a trait the Conservatives prize above anything else, and is the essence of their growth policy.
Wouldn’t it be ironic if they stifled the economy by closing all routes to freelancers that make working for themselves worthwhile?