Umbrella company contractors could find they have to compete against more people in order to secure a role after Adrian Marlowe suggested that temporary work is becoming a more attractive option for jobseekers.

The ARC’s chairman said that the traditional idea of people seeking permanent employment as soon as they leave education is now outdated. The agency workers regulations have created a level playing field with respect to equal pay and working conditions and this makes agency work an attractive alternative to permanent employment. People working on a temporary basis through recruitment agencies already enjoy significant advantages, such as flexibility, that are not open to their permanent counterparts.

Graduate unemployment has hit the IT sector hardest over the past year, according to the Higher Education Careers Service Unit. Unemployment amongst IT graduates rose from 13.7% in 2008 to 16.3% last year and could lead to an increase in the number of skilled IT people choosing to go self-employed.

Despite this, Richard Nott from CWJobs.co.uk claims there are not enough skilled IT staff. Although the current figures show a lot of graduates have been unable to secure a position due to current market conditions, the underlying trend still shows a lack of graduates with the right skill set to fit the world of IT.

Of the people who graduated in 2009, 8.9% or just over 21,000 were still without a job in January this year, registering the highest rate of graduate unemployment since 1993.

A survey conducted by Orange found that 10% of graduates planned to start up their own business as soon as they graduated. 69% of graduates want the chance of flexible working and nearly half say the opportunity to work remotely is no longer a privilege; it is a must.

This sentiment is shared by the general working populace with 68% saying that working from home was an important element of job satisfaction.

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There has been plenty of good news recently for umbrella company IT contractors. Gartner, the industry analysts expect to see enterprise IT spending rebound next year after the last two years in decline.

Gartner predicts that IT spending in 2011 will increase by 1.3% to £493.2 billion across Europe, the Middle East and Africa. It was also noted that Western Europe would witness compound annual growth of 0.8% in the years to 2014.

There could be even more opportunities for IT contractors if a recent report from the Information Technology Industry Development Agency is correct. It predicts that outsourcing in the IT sector could increase by up to 600% in the next 10 years. There is a huge potential and the Everest Group, which advises Global 1000 business leaders, estimates the global sourcing opportunity in Europe will be worth between £155 billion and £186 billion.

IT contractors have already witnessed an increase in demand for their services over the last quarter months, according to JobsAdWatch.co.uk. The website reported a 13.3% increase in the recruitment of IT contractors in the past 3 months.

More good news came in the form of the Monster Employment Index for October which showed a sharp rise in the number of online contract opportunities across key sectors. Professional services opportunities for contractors working in consultancy, engineering, IT & Telecoms, management and marketing led the way and helped towards increasing the year on year total by 21%.

Strong growth was recorded in Wales and the Midlands; up 14% and 13% respectively. Julian Acquari, the managing director of Monster UK & Ireland, said these latest findings were encouraging. Most UK regions and industries reported increased online recruitment last month to extend a trend of improvement in the jobs market.

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The MD of technical recruiter CBSbutler, David Leyshon, believes that the government should tighten up immigration rules to ensure that highly skilled migrant workers from non European countries are not stuck in menial roles.

Research from the Home Office shows that nearly 1 in 3 highly skilled non-EU workers, who arrived in the UK on Tier 1 visas, are now in menial jobs such as security guards or shop workers.

These individuals were brought into the country for specific sectors such as IT or construction. At the time there was a high demand for their skills but in the last 18 months the demand has declined and although the workers came here on Tier 1 visas, there is now no work for them in their specific role. Leyshon wants to see the government enforce the Tier 1 guidelines, which say a specific job must be waiting for an immigrant.

Meanwhile, the temporary immigration cap is having an adverse effect on recruitment in the care, construction, manufacturing and logistics sectors, according to de Poel. One in five recruiters say they are now finding it harder to recruit skilled staff. The CEO of de Poel says that the government should rethink the immigration system so that the economic recovery is not harmed and ensuring that migrants cannot undercut British jobseekers and contractors.

There are also concerns that a permanent cap on skilled non-EU migrant workers will mean the UK is unable to recruit the 70,000 engineers it needs for the renewable energy sector.

Earlier this week David Cameron announced that the construction of new offshore wind turbines would create 70,000 jobs in the green energy sector. He also said that the government would do nothing to impede British companies from recruiting highly skilled workers from around the globe.

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Dr John Philpott, the chief economist at the CIPD, believes that the executive search market will continue to grow because neither the public nor the private sector has the ability to find and retain highly skilled workers.

This news could be good for umbrella company contractors who are searching for their next project. However, not all the news is positive.

Philpott also believes that unemployment will keep on rising until summer 2012, when it will peak at 2.85 million.

The IT sector has seen a decrease in the number of manager and project manager vacancies over the past few months. IT support staff are still in demand, as are web developers and people with experience in SQL, Java and .net.

Alex Farrell, MD of the IT Job Board which published the above findings, said that the decline in project management vacancies showed that companies have cut back on large IT projects that require specific skills. He also remarked that both permanent and temporary vacancies have decreased in the last few months and jobs for contractors now represent 25% of the vacancies advertised.

Prospects for temporary workers are not looking too promising at the moment either. A recent survey carried out by the REC has discovered that two thirds of the agencies that recruit for public sector bodies have seen a 20% drop in placements. This drop was evenly spread amongst support and admin roles and front line staff.

Most agencies expect to see a considerable drop in demand for temps over the next 12 months. The REC will however continue its campaign to promote the benefits a flexible workforce can bring to the country’s economic recovery.

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The chief economist at the Bank of Scotland has predicted that the Scottish economic recovery is going to slow down in Q3.

The Scottish economy has been on a bumpy road since emerging from the recession at the end of last year. Although the private sector has been growing for the past 13 months, economic growth actually stalled in the first quarter of this year.

Scottish manufacturers’ sentiment dropped 20 points to zero between quarters one and two according to the CBI index and the Consumer Confidence Index, compiled by Gfk NOP, registered -22 last month.

Those looking for new employment will be heartened by the news that the Bank of Scotland’s Report on Jobs showed an increased demand for permanent workers for the 8th consecutive month.

Growth in the leisure, tourism and travel sectors continues to outstrip growth in business and financial services. And the manufacturing industry is receiving more orders and they are rising faster than inventories, so manufacturers will need to increase the supply of finished goods if they are to keep up with demand.

However, it is thought that the recovery will slow down in the autumn months as widespread concerns continue over government spending cuts.

However, good news for the Scottish jobs market comes with the news that Hewlett Packard is to create 700 new IT jobs at its plant in Erskine, something which could benefit umbrella company IT contractors. The technology giant is setting up a service hub in Renfrewshire, partially aided by a government grant of £7 million.

Alex Salmond, the First Minister, is delighted at the news saying it is testament to the skilled workforce in Scotland that HP has decided to invest in the region and it also points to conditions improving in the IT sector.

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