Surge in demand for contract staff amid declining hirer confidence in economy

contract work demand growth and decline concept

The latest JobsOutlook, produced by the Recruitment and Employment Confederation (REC), has revealed a surge in demand for short-term contract and temporary staff in the June to August quarter.

The increased demand for work as a contractor represents a rise of twelve percentage points compared to the previous quarter, March to May, resulting in an index of +16 per cent. Last month’s report, which covered the May to July quarter, measured contracting work demand at +2 per cent. Medium-term demand for work as a contractor and temp staff fell slightly this quarter, however, by one point, to net +4 per cent.

Short-term demand for permanent staff working as full-time employees also increased, by five percentage points from the previous quarter, to net +21 per cent, whilst employer’s confidence in the UK economy fell further, falling by four points to net -30 per cent. Medium-term demand for permanent employment also increased over the same period.

As has been the case for several months, the reasons for the waning confidence of independent contractor and other freelance hiring, recruitment agencies, employers, etc. was firmly placed on the uncertainty surrounding Britain’s exit from the European Union, which has heightened in recent months as a no-deal Brexit becomes increasingly likely.

The REC’s chief executive, Neil Carberry, believes that the ongoing Brexit debacle including the process and regulations involved may be discouraging people from coming to work in the UK:

“Today’s figures emphasise why businesses are so frustrated at the lack of a smooth and stable resolution of the Brexit debate.

There is growth to pursue and there are jobs to create – businesses believe in themselves and are ready to go. But the unstable economic outlook continues to put a dampener on their ambitions.

“Attracting workers to the UK to fill critical shortages and making sure they feel welcome, speeding investment decisions that create jobs, and investing in skills development for all workers are critical to our future success. It’s time to get back onto this agenda.”

Other key points from the report include:

  • Seventy-five per cent of employers highlighted that they have little or no secure surplus workforce capacity, rising to eighty-five per cent in the public sector.
  • Forty-nine per cent of employers with permanent staff expressed concern about the sufficient availability of candidates for permanent employment hire in job sites. Health & Social Care, Engineering & Technical, and Construction were the areas of most concern as a service provider.
  • Eighty-seven per cent of UK employers highlighted the importance of a recruitment agency’s regional and/or sectoral expertise when choosing a partner among several recruitment agencies.

JobsOutlook is compiled in partnership with market research experts ComRes.

25th September 2019.