Election jitters fail to dampen contractor hiring

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Employers are not letting uncertainty surrounding May’s election deter them from expanding their temporary workforce, new research has shown.

The latest Recruitment and Employment Confederation (REC)/KPMG JobsOutlook survey reveals that 38% of businesses plan to take on more contingent workers in the next three months. A further 58% planned to maintain their current quota.

Almost half (45%) intend to hire additional contractors and temps over the coming year, a reflection of growing confidence among UK businesses.

This uptick in hiring intentions could perhaps be explained by the fact that 45% of employers have little or no spare capacity to take on more work – an increase of from 39% in March. A further 45% reported having “a little capacity”.

Businesses are increasingly turning to contractors to combat the capacity crunch, due to freelancers’ ability to provide short term access to key sills. In addition, a shortage of permanent talent is fuelling demand for contingent workers.

The rise in demand is also pushing up assignment rates, as firms battle with each other to secure the talent they need. REC’s survey found that 71% of businesses pay more for contractors than they do for permanent employees.

Meanwhile, the report revealed that the talent crisis continues to threaten the UK’s economic recovery. Kevin Green, REC’s chief executive officer, said: “The biggest challenge, and a real constraint on continued growth in our economy, is the lack of candidates with the right skills to fill the vacancies employers have to offer.”

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Are you a contractor? Have you noticed an increase in demand for your services? Do you believe this trend is likely to continue? What would you do to solve the skills shortage problem? Join in the discussion on Twitter, or leave a comment below.