Contractors continue to experience demand for their services, as clients capitalise on improving economic conditions by plugging skills gaps and responding to growth through contingent hires. However, ongoing concerns over the UK’s future EU membership could derail labour market momentum.
This is according to the Recruitment and Employment Confederation’s (REC) JobsOutlook for February 2016, which shows that 77% of contractor clients consider market conditions to be improving.
With demand for contractors on the up, already skill-deprived firms could be at risk of having to pick from a significantly smaller talent pool if Brexit fears are realised, as REC chief executive Kevin Green highlights:
“We urge both sides of the [EU] argument to keep in mind that UK businesses must have sufficient access to the global labour market in order to thrive. We need more skilled people to fill job vacancies in the UK, not fewer.
“SMEs and big businesses are both feeling the pressure. The need for people to do the jobs available is driving firms to become more innovative and creative in their recruitment strategies,” Green continues.
Continued economic growth looks set to translate into a further increase in terms of contractor engagement. Overall, 98% of clients plan to either maintain or increase contractor numbers over the next three months, with 95% planning to do the same over the medium-term (4-12 months).
This comes in spite of the fact that 95% of firms are operating at a capacity, emphasising the pivotal role the contractor workforce plays in facilitating business growth and innovation.
However, rather than being seen simply as an extra pair of hands to cover capacity shortages, contractors are gaining increasing recognition for the intrinsic benefits they offer through their advanced skillsets.
This is evidenced through the fact that nine in ten clients (90%) emphasised the importance of using contractors to provide short-term access to strategic skills. This marks a 50% increase on respondent numbers when asked the same question in January 2014 (60%).
Over the same time-frame, the proportion of clients reporting to use contractors as a means of reducing costs has decreased from 63% to 49%, highlighting how firms are willing to spend increasing amounts to engage with contingent staff.
Once again, the engineering sector came top of the pile when clients were asked in what areas they expect to find the most recruiting challenges. The report itself suggests that it may be an early sign of concern over the potential impact of changes to travel and subsistence expenditure rules.