Not surprisingly, the faltering economy is impacting negatively on the jobs market and the availability of contracts. However, proposed government spending may provide contractors with their next set of contracts in the coming 12 months, if they can adapt to the different challenges posed by the public sector.
In this month’s ContractorCalculator Market Report:
- The Monster Employment Index falls sharply in line with the 12-month trend, despite a slight increase the previous month
- Demand slows for some contracting sectors, notably financial services IT and engineering
- Public sector job creation could be the salvation for out-of-work contractors, as Prime Minister Brown promises 100,000 new jobs
- Although MEPs have voted it out, the UK may save its 48-hour opt-out just when the economy needs maximum flexibility in the job market
- Will narrowing the IT skills gap become one of the biggest challenges for the economy, as well as the biggest opportunity for IT contractors?
Monster Employment Index back on trend – downwards
Despite a small increase in November 2008, the Monster Employment Index decreased by 9 points last month – the largest monthly fall since January 2008 – to reach a 19-month low.
Online job availability fell across the board, with the construction sector being one of the hardest hit. Healthcare contractors, such as locums and technicians, can take cheer as healthcare positions have risen for a second month running.
“Although companies are increasingly advertising their vacancies on the internet, online job opportunities are now down by 10% from the same time last year,” explains Hugo Sellert, Head of Economic Research at Monster Worldwide. “Yet despite the economic climate, there are pockets of sustained growth, most notably in education, healthcare and government.”
Although companies are increasingly advertising their vacancies on the internet, online job opportunities are now down by 10% from the same time last year
Hugo Sellert, Monster Worldwide
The top five sectors looking for candidates were:
- Healthcare and social work
- Telecommunications
- Education, training and library
- Research and development
- Public sector, defence and community.
City IT contractors and engineers hard hit
The reverberations of the credit crunch and collapse of the financial markets have hit IT contractors particularly hard, as confirmed by figures released by Powerchex, the pre-employment screening firm.
Vacancies in financial services for IT contractors in December were down 75% from those in November. Although this is an astonishing drop in only one month, December is traditionally part of the ‘contracting winter’, when organisations are more in ‘party mode’ than ‘hiring mode’.
Research published by Giant Group shows that the engineering sector is also suffering, with the number of engineering contractors out of work for 90 days or more increasing by 38% in the last quarter. Not surprisingly, engineers are citing job security as a higher priority than fees when selecting contracts.
Public sector contracts may increase, but are contractors ready?
The government has vowed to spend its way out of recession, with Prime Minister Gordon Brown promising to create 100,000 new jobs through spending on public works, digital technology and environmental projects.
This could potentially reverse the current trend of reducing contract opportunities, particularly for engineers and IT specialists. However, major public sector recruitment agency Hays Public Services says workers used to the private sector are ‘woefully unprepared’ for life in the public sector.
“It is clear to us that people underestimate how tough it can be to get into the public sector, how fierce the competition will be, and how many will be seeking work for which they are under-trained,” says Mark Staniland, managing director of Hays Public Services.
People underestimate how tough it can be to get into the public sector, how fierce the competition will be, and how many will be seeking work for which they are under-trained
Mark Staniland, Hays Public Services
He feels that the perception of public sector work as less demanding is misleading contractors. “The message we have to get across is that people simply must retrain in order to get ahead, not just wait and hope their private sector skills will magically transfer. Often they won’t,” he insists.
The 48-hour opt-out could be saved
Fears that contractors may be forced to work no more than 48 hours per week were raised when the European Parliament recently voted to end the UK’s opt-out of laws that ban contractors from exceeding that limit.
However, employment law experts are urging contractors not to panic, as the vote was only the opinion of the European Parliament, and not a decision of the Council of Ministers.
According to employment lawyer Tom Flanagan of Pinsent Masons: "The Council of Ministers will have to knock out a deal early in the New Year and while we may lose the opt-out, I don't think that our European partners would do that to us."
The 27 member states of the European Union have until May 2009 to agree a deal through the Council of Ministers; but if they don’t, this means that the status quo, and therefore the opt-out, remains in place, allowing contractors to work the hours they want to.
The IT skills gap provides opportunities for contractors
The results of a survey of IT workers from across the sector published by The IT Job Board demonstrate that the UK still struggles to find enough qualified IT professionals. Of those questioned, 56% said there is a shortage of IT workers and 72% said this skills gap is growing.
When asked why the gap exists, respondents said that it is a combination of not enough IT professionals, coupled with rapid changes in the IT sector, with IT skill sets not keeping pace with the market.
Whilst there are signs that the UK is entering a deep and potentially prolonged recession, there still appear to be many opportunities in the contracting sector for those contractors able to spot and exploit them.
In past downturns, across all key contracting sectors of IT, engineering and construction, those contractors who won contracts were not necessarily those best skilled for the contracts, but were those better at winning contracts.