Skills shortage finally takes its toll on contracting market

According to the REC, the skills shortage has finally persisted long enough to finally impact the freelancing and umbrella company contracting communities.

The REC’s latest jobs report for January found that yes, we had an increase in demand for both freelance and permanent workers, but the harsh truth was that the rate of growth was at its lowest since October of 2014. The problem is that there’s simply not enough freelance staff to go around, especially because the skills shortage has gone on so bloody long at this point.

So what exactly does this mean for people who aren’t economists? What exactly is this “skills shortage” rubbish that everyone keeps talking about? Well the story behind this is that British firms have been having a devil of a time finding permanent employees to fill vacancies, mostly because the university system in the UK is bollocks. Graduates emerging from university just don’t have the skills and experience these firms need to replace a rapidly aging workforce. Businesses have as a result turned to temporary workers like freelancers and umbrella company contractors to fill the gaps this skills shortage has created.

Now in the short run this isn’t that terrible, as the number of contract workers in the UK has been rising steadily over the past few years, especially because most Brits have realised how bloody awful it is to work for a boss and have since transitioned into working for themselves. The problem is that there’s still a finite number of temporary workers in the country, and eventually even these stalwart souls are going to end up being too busy to keep up with the burgeoning demand for workers.

So this is where we are now. Vacancies are going up like mad but the number of permanent and temporary workers are not increasing quickly enough to keep the rising tide from washing over the walls. Eventually most economists think this will self-correct, as demand will drop off after businesses find it impossible to continue to grow, but the bad news is that this will likely drag our economy down and slow our recovery.

What else is new, honestly? Seems like we just can’t bloody win when it comes to things like this. At least those workers out there that can fill these positions can benefit from being highly in demand until things normalise at least.

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