Interim and contract opportunities drive employment recovery but talent crisis gathers momentum
Its latest employment trends Index shows that contract and interim vacancies increased by 20% in quarter two, compared to the same period last year, and by 11% since quarter one.
The latest Index figures mirror findings from think tank The National Institute of Economic and Social Research (NIESR) which show that Britain’s economic recovery accelerated in the second quarter.
Although there was a surprise fall in manufacturing output in May, this is expected to weigh “only marginally” on the wider economy.
The positive picture is further enhanced by data from the Office of National Statistics (ONS), which indicates that UK employment is rising at a record pace, helping the jobless total fall to a six-year low.
Public sector hiring leads the way but talent crisis gathers speed
Beneath this headline figure, Venn’s data reveals that public sector hiring led the way in quarter two, with 10% more vacancies available than in quarter one, while year-on-year, recruitment was up a remarkable 40%.
This growth was largely driven by the NHS, where despite press reports of funding shortfalls, hiring for contractors in the core non-clinical areas of finance, IT and HR continued apace, boosted in part by the Government’s £3.8bn Better Care Fund and the continued integration of health services into the local community.
The Index reveals that buoyant employment activity across the NHS was coupled with a growing talent crisis in quarter two, with demand far outstripping the supply of candidates. Lengthy vetting procedures in the health sector mean (Clinical Commissioning Groups) CCGs are using contractors to plug the gaps.
Legal sector recruitment surges with five roles for every candidate
On the private side, after a frenzy of hiring during quarter one, contractor vacancies fell in quarter two by 31%. Year-on-year, private sector recruitment registered a 28% drop, as demand for contractors stabilises following the brisk trade of 2013, when the economy finally turned a corner.
Despite an overall drop in private sector hiring, the Index reveals quarter two was characterised by several private sector & lsquo;pockets’ which experienced major surges in hiring – most notably, legal conveyancing, driven by the UK’s continued property boom.
The UK’s biggest house builder, Barrett, for example, recently revealed that it sold 8.6% more houses in the year to 30 June than it had in the previous year, while mortgage lender Halifax’s figures show property prices keep on rising.
Commercial conveyancing is also buoyant, as the UK’s construction activity continues to gather momentum. This is echoed by Markit’s UK Construction Purchasing Managers’ Index for June, which showed that commercial building activity expanded at its fastest rate since February.
While the above puts contractors with the right skill set in a great position, the legal market is also characterised by a marked skill shortage. On average there are five roles on offer for every one candidate, which means employers with a definite talent need have been required to move quickly through the interview and appointment process.
Talent shortages push up pay rates
With the public sector and pockets of the private sector characterised by talent shortages, contractor pay rates have risen accordingly in areas where demand is highest. For example, in healthcare finance, where the need for candidates is particularly acute, senior professionals are securing almost £500 per day. Similarly, as CCGs come under increased scrutiny over the way in which private contracts are handled, senior contract specialists are commanding in excess of £500 per day. In the private sector, London HR specialists are also benefiting from strong demand in terms of remuneration, with senior HR managers being paid up to £250 per day.
Despite this, the Index points to evidence that many firms remain in a pre-recession mind-set, and unaware of the shift towards a candidate driven market, have yet to adjust their remuneration packages to attract the best talent.
Jodie Finn, associate director at Venn Group, says, “Our latest figures highlight the pivotal role that contractors are playing in providing the labour market flexibility that allows public sector institutions to operate effectively and private businesses to expand rapidly. With commentators forecasting consistent, sustainable growth for the UK economy, which according to reports is now past its 2008 peak (ONS), we foresee opportunities for contractors will remain abundant as we head into H2 2014.”