Contracting markets appear to be strengthening alongside the UK economic recovery. The increased demand for contractors across all core disciplines shows no sign of letting up. In Scotland, demand growth slowed, but growth remained – it was only the rate of growth that slowed. Across the UK engineers are in great demand and equally short supply. Prospects for the UK’s oil and gas contractors have been strengthened, and the UK market is bucking the global trend for contractors’ pay.
In this month’s ContractorCalculator market report:
- Engineering contractor demand showed a sharp increase in the first month of 2014, shows January’s Recruitment and Employment Confederation (REC)/KPMG Report on Jobs
- January 2014’s Bank of Scotland Report on Jobs showed that contractor demand growth slowed during the month, although the labour market’s overall health is at levels not seen since before the recession
- The Recruitment and Employment Confederation’s latest JobsOutlook shows that nearly half of clients plan to increase contractor hiring for rest of 2014
- Oil and gas contractor skills are badly needed to ensure the full potential of the North Sea is realised, concludes the Oil and Gas UK’s Activity Survey 2014
- Skills shortages in the North Sea have helped UK oil and gas contractors maintain contract rates despite a global fall, reports the Hays Oil & Gas Global Salary Guide.
Engineering contractors see surge in demand
Engineering contractor demand surged during January 2014, leaping from sixth place in the demand league table during December 2013 to first place. This is according to the Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, which also showed that vacancies across the board grew at their fastest rate since May 1998.
REC’s Tom Hadley believes this is down to infrastructure improvements: “Britain’s building boom and major infrastructure projects have seen demand for permanent construction and engineering workers soar this month. However recruiters are struggling to source skilled people to satisfy this demand.”
Britain's building boom and major infrastructure projects have seen demand for permanent construction and engineering workers soar this month. However recruiters are struggling to source skilled people to satisfy this demand
Tom Hadley, PCG
Elsewhere in the contracting sector, the core disciplines of accounting and financial, IT, interim and construction were all firmly in growth territory, but lagged behind the growth seen in blue collar and lower skilled/lower paid temporary sectors.
Contractor demand growth slows in Scotland, but pay pressures remain
Contractor demand growth in Scotland slowed during January 2014, although all core contracting disciplines remained well into growth territory. In contrast to the rest of the UK, the engineering category dropped three places from third to seventh in the demand league table.
This is according to the latest Bank of Scotland Report on Jobs, which more encouragingly showed that the composite index of contractor and permanent recruitment that provides a snapshot of Scotland’s labour market’s health, the Bank of Scotland Labour Market Barometer, has reached levels not seen since before the recession.
“January [2014] showed a further marked improvement in Scotland’s labour market, returning the Barometer to pre-crisis levels of 2007”, notedBank of Scotland chief economist Donald MacRae. “The number of people appointed to both permanent and temporary jobs increased rapidly while vacancies rose sharply across all sectors.”
Contractor hiring set to increase by half of clients during 2014
Nearly half of clients plan to increase contractor hiring for rest of 2014, says the Recruitment and Employment Confederation’s (REC) latest JobsOutlook. The report adds that skilled technicians and engineers will top the skills shortages list this year.
The findings “are a reflection of employers’ growing confidence in the wider economic recovery as well as their belief in their own businesses”, says REC director of policy Tom Hadley.
By sector, finance and sales saw the largest increases in contractor demand. Between January 2013 and January 2014, demand for financial contractors rose by 110%, and demand for sales resources by 80%.
REC’s Jobs Barometer, which provides a snapshot of labour market conditions based on both hiring intentions and economic outlook, reached a peak of 38 during January 2014. This is 11 points higher than during January 2013, and is the highest level reached since it began in March 2009.
Oil and gas contractor skills will underpin the future of the North Sea
Oil and gas contractors with core exploration, production and enhanced oil recovery skills are badly needed for North Sea growth. These are the conclusions to be drawn from Oil and Gas UK’s Activity Survey 2014, which warns that without increased exploration and production, the UK Continental Shelf will not fulfil its potential.
“Without greatly increased exploration success, more conversion of discoveries into production, a significant improvement in productivity, and a willingness to deploy enhanced oil recovery, we will not realise the full economic potential of our country’s natural resources,” warns Oil & Gas UK chief executive Malcolm Webb.
The Activity Survey also highlights contractor rates may be kept under pressure, as operating expenditure rose by 15.5% to an all-time record of £8.9bn in 2013, and is anticipated to rise further to around £9.6bn in 2014.
Oil and gas contractor skills shortages help sustain UK and North Sea rates
Oil and gas contractor skills shortages are helping the UK market buck the global trend of flattening salaries. This is according to the new Hays Oil & Gas Global Salary Guide, which shows that UK average rates have risen by 0.85%, whereas globally there has been a fall of 1% in average rates.
“Salaries in the UK have held up well in a tough climate. Professionals with very niche skills and experience can command high salaries and are highly sought after, and this will become more widespread over the coming months,” notes Ed Allnutt, director of Hays Oil & Gas.
After two years of sharp increases, salaries and rates have begun to flatten and hirers are placing more emphasis on benefits packages for their permanent staff to retain key talent. Nearly a third of UK employees are being offered bonuses and a quarter are being offered pension plans.
Clients operating in the North Sea are having to compete with international opportunities for contractors, as North Sea experience is highly prized in other oil and gas provinces worldwide.