Contractors fared better than their permanent counterparts as uncertainty prior to last month’s EU referendum saw many firms continue to favour contingent hires.
The Recruitment and Employment Confederation’s (REC) Report on Jobs for June 2016 shows that, whilst permanent placements fell for the first time since September 2012, contractor agency billings continued to rise.
“Just like the financial crisis of 2008/9, the flexible workforce has stepped in and ensured that clients have access to the necessary skills they need in difficult circumstances,” comments ContractorCalculator CEO Dave Chaplin. “Once the dust settles, contractors will continue to play an integral part in helping the UK labour market to bounce back.”
The rate of growth, however, eased to a nine-month low, with slower increases recorded in all regions. Inevitably, panel members unanimously cited Brexit concerns as the decisive factor, which has also contributed to the moderation in pay growth.
Whilst contract rates continued to rise, they did so at the least marked rate in three months, with only London seeing an acceleration in this time. For REC chief executive Kevin Green, clarity over the future of the UK economy is key to ensuring that the prospects of both permanent and contract staff recover swiftly:
“Uncertainty during the run-up to the referendum saw many employers suspend permanent hiring and instead bring in temporary, contractor or interim staff to hedge against potential changes to their growth prospects.
“Whilst it is too early to assess what the impact of the vote to leave the EU will be on jobs, our data underlines the need for uncertainty to be minimised so that our economy and our labour market are not adversely affected. The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like.”
Despite slowing momentum, the gulf between contractor supply and demand continued to widen during June. Contractor availability fell once more, albeit at the least marked rate in 33 months, whilst the number of vacancies showed a moderate increase.
The figures have served to compound concerns over a post-Brexit skills crisis, with Green maintaining that access to talent from across the EU must be maintained for the UK labour market to remain competitive, concluding:
“We are consulting our members and so far it is clear that for recruiters the best way to ensure the continued health of our labour market, and the economy that relies on it, is by maintaining membership of the single market and access to skills across the EU.”
Meanwhile, despite being considered the sector most likely to suffer as a result of a Brexit, construction rose to fourth in the contractor demand league table. Engineering fell to sixth, whilst finance and IT came in seventh and eighth respectively.