Contractors in Scotland are enjoying even better market conditions as demand continues to rise, according to the latest Report on Jobs from Bank of Scotland.
October saw a sharp increase in placements of temporary and contract workers through recruitment consultancies, the research shows, with higher client demand driving expansion. Overall, billings for contractors and other flexible staff rose considerably over the course of the month, representing the quickest rise since January this year.
Interestingly, this occurred at the same time as permanent appointments shot upwards, though the pace remained just below the records set in July and August. Whereas contractors often see opportunities expanding during periods when demand for permanent staff is fairly weak, it seems that demand is rising across both categories concurrently.
Rather than seeking temporary solutions to short-term peaks in demand, it looks as though organisations are equipping themselves for more sustainable, extended growth. As a result, the bank’s Labour Market Barometer now stands at 60.9, up from 60.0 in September and far above the base level of 50 which indicates no change.
“The recovery in the Scottish economy is showing through in growing employment and rising pay,” says Donald Macrae, Bank of Scotland chief economist.
“October’s Labour Market Barometer rose to its joint-highest level in over six years taking the index back to pre-recession levels. Demand for staff rose at a marked pace across all sectors while the number of people appointed to jobs rose sharply in the month. Salaries for permanent jobs increased at a strong pace.”
In spite of a growth rate that was slightly slower than September, October saw a healthy rise in permanent salaries. For contractors and other flexible workers, the pace of improvement also slackened, but remained above the long-term average for the index as a whole.
Rising pay is perhaps unsurprising given that demand is clearly surging. On contractor vacancies, the report posted the second-highest growth rate in six years even as demand for permanent workers shot up at the quickest pace since July 2007. Meanwhile, the increase in appointments might explain why availability plummeted, dropping at the most dramatic rate since December 2004. Among permanent workers availability also fell, although the pace was less striking. Indeed, it fell at the weakest rate in four months.
Contractors across a wide range of sectors are likely to benefit from the surge in demand - all eight of the sectors monitored posted an improvement, the first time this has happened since June 2012. This means that IT and computing, engineering and construction and accounts and finance have all shown signs of life, although the medical sector remains at the top of the table. Given that IT showed the largest rise in demand among permanent workers, it is likely that this will also translate into a growing need for interim and flexible workers.
The fastest rise in billings for contractors and other temporary workers was reported by recruiters in Glasgow, which could be related to the fact that the city saw the biggest decline in availability for permanent staff. However, it was Aberdeen where availability declined most for contract workers - perhaps why this was also the city registering the biggest rise in hourly pay.
I am a chartered tax advisor with a specialism in the freelance contractor sector advising contractors on how to structure their affairs and recruitment businesses and end hirers on the effective…
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