Two surveys just out from the Recruitment and Employment Confederation (REC) and KPMG suggest that employers are using temporary workers and contractors as a risk management strategy in the face of continued economic uncertainty.
Commenting on the results of the Report on Jobs, a monthly survey conducted by NTC Economics on behalf of the REC and KPMG, REC Chief Executive Kevin Green says, “Every week, 1.3 million temporary workers are keeping business in the UK moving. Temp and contract work provides vital opportunities for workers.”
Temporary and contract billings were up again in May as survey panellists said firms are choosing this type of worker because of uncertainties about future business prospects.
Using contractors and temps to exploit market opportunities
In its second survey to be published this week, REC also asked over 100 HR managers and business owners about how they use and perceive agency workers. Their main reasons for using a flexible workforce included:
- Exploiting new market opportunities
- Avoiding taking hasty decisions to recruit permanent workers
- Reducing the pressure on the existing workforce
- Filling specialist positions where permanent workers are in short supply.
Anne Fairweather, REC’s Head of Policy, told ContractorCalculator, “The temp market is holding up across the board, with companies using temporary and contract workers to weather the economic storm.”
And there is more good news for contractors, as 67% of those surveyed said they hired a temporary or contract worker to fill senior and highly skilled roles, demonstrating the opportunities to work on enjoyable, meaningful and challenging contracts.
EU Agency Workers Directive
Commentators on both surveys have expressed concern over the outcome of the EU Employment Council meeting on 9 June. According to REC’s Kevin Green, “…it is crucial that the detail of the proposed EU Agency Workers Directive which is being discussed in Luxembourg does not impact on the viability of the UK temp model."
Unless the UK can secure an amendment to the proposed EU Agency Workers Directive, the effectiveness of the UK’s flexible labour force that is so attractive to inward investors will be reduced significantly. Without doubt, the cost of hiring temporary workers will increase and the £24.6 billion recruitment sector will take a huge hit, as many contractors may opt to work for clients direct.
Demand for Temporary and Contract staff
All eight categories of contract and temporary staff covered by the Report on Jobs survey are showing an increase in demand. In first place are contractors and temps in the nursing and medical sector, which confirms our report on contractor demand in Scotland in our June Market Report.
Despite the slow-down in the housing market, engineering and construction contractors are second in demand, closely followed by hotel and catering and blue-collar workers. IT and computing is in fifth place, down from fourth in the comparable survey a year ago.
In all categories the survey shows stronger demand for contractors and temps than last month, compared with a decline in demand in four of the eight categories for permanent workers. So the claims that firms are relying on contractors and temps to carry them through the tough times ahead have some basis in fact.
More available workers put pressure on pay
But it’s not all sunshine and roses for temps and contractors. Yes, there are more opportunities for contracts out there, but there are also more people on the market to fulfil them. REC’s Report on Jobs cites anecdotal evidence that increased household costs coupled with the impact of the credit crunch is forcing many workers to seek second incomes.
This increased availability of staff has resulted in a downward pressure on salaries, putting employers in control of the market, with pay growth hitting a four year low. However, if you are a chef, lorry driver or receptionist, apparently the world is your oyster this month, as demand for these roles is soaring.
As permanent job opportunities stagnate, following the trends reported in REC’s surveys, temporary and contract positions will be ever more important for maintaining the diversity and dynamism of the economy in the face of a global slow-down.