IT contractors operating north of the border may be relieved to learn that the Scottish private sector growth rate accelerated again in December.

The latest Bank of Scotland PMI showed that employment rose slightly for the second consecutive month and, for the first time in four months, Scottish firms recorded an increase in new business. The headline PMI was up 0.1 points to 51.2 in December, helping it to edge away from the 50 mark that separates expansion from contraction.

The biggest rise in new business was found in the business services sub-sector. Accountants and lawyers are included in this group, which rose from 51.2 in November to 54.5 last month.

New business growth increased for the second consecutive month in the financial services sector and ended the year with an Index reading of 54.6; up from 53.5 in November.

However, it would appear that the manufacturing sector is in decline. Key export markets are suffering due to the crisis in the Eurozone and the manufacturing output index dropped sharply to end the year at 44.5. In November it had been 51.1. Furthermore, new export orders decreased for the third month in succession.

Both manufacturing and services firms did report a marginal increase in headcounts in December, but growth in Scotland is still lagging behind the rest of the UK, which ended the year with a PMI of 53.2. Nevertheless, December’s figures do suggest that the country may not fall back into recession.

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Interim managers are back in demand according to the latest quarterly survey from the IMA.

Ipsos MORI conducted the survey covering the period from July to September. The results showed that despite the turbulent economic conditions, 22% more new assignments were recorded compared to the previous quarter.

Completed private sector interim managerial assignments rose to their highest level since the fourth quarter of 2007. 65% of assignments were completed for private sector organisations in Q3; a rise of four percentage points on the second quarter.

The IMA also saw an increase in the number of enquiries from member firms requiring interim managers. The Association said enquiries have risen steadily this year and are now 68% higher than they were in the fourth quarter of last year.

IMA chair, Jason Atkinson, said the summer season generally sees a slow-down in hiring, and coupled with the struggling economy, its quite amazing to see a 22% increase in the number of assignments. This shows that companies continue to value interim managers as a flexible and highly effective resource that can be utilised come rain or shine.

He went on to say that it was encouraging to see more completed assignments in the private sector and usage in that sector had now returned to 2007 levels.

The IMA celebrates its 25^th anniversary next year and since its inception the interim management sector has grown into a mainstream resourcing option contributing £1.5 billion to the British economy. This trend is expected to continue as businesses recognise interim managers as an efficient resource that can be put in place quickly, he added.

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Private sector suppliers, including limited company contractors, are focusing increasingly on their cashflow and threatening clients with legal action if they do not settle their invoices in a timely manner.

Lovetts, a debt recovery firm, reported recently that the average timespan from invoice date to ‘letter before action’ is now 68 days; down from 72. Suppliers’ willingness to wait for payment has now been decreasing for the last three consecutive quarters.

Lovetts’ MD, Charles Wilson, said that suppliers have adopted an attitude of debt is debt and it makes no difference who the customer is. He suggests that last year’s forbearance has now run its course and suppliers are getting tough on any late payers.

He went on to explain that last year, businesses gave customers much more leeway before threatening legal action in order to maintain a good working relationship.

However, companies must make sure they carry out their threats and pursue a legal claim. If they don’t follow up, they will be accused of crying wolf.

80% of businesses that send letters warning debtors of recovery action do secure payment, so they are an effective deterrent. But with debts to SMEs totalling a record £33.6 billion, suppliers must demonstrate that they mean business when it comes to chasing overdue invoices.

Bad debts are not the only problem facing UK SMEs at the moment.

Global recruiter Hays conducted research that discovered that 55% of jobseekers think they could get better benefits working for a larger organisation, and 52% are concerned that smaller firms lack stability.

Small businesses need to attract skilled and talents personnel in order to remain competitive and employers should take the time to explain the direction the business is heading and future growth opportunities to potential recruits, Hays director Charles Logan said.

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Contractors working through an umbrella company might be interested to learn that nearly 50% of the UK’s SMEs are struggling to find the right staff.

The British Chamber of Commerce surveyed 6,000 small businesses and discovered that 45% of them felt it was either quite difficult or very difficult to find employees who were a good fit for a position.

We now have 2.57 million unemployed individuals in the UK and this figure could rise further as more people are made redundant from the public sector. Despite this, a lot of firms say candidates simply don’t possess the right skills. They complain that candidates are deficient in literacy and numeracy, whilst softer skills such as communication and timekeeping are also in short supply.

Only 45% of companies said they were very or fairly confident when it came to recruiting graduates, and that percentage dropped down to 29% when it comes to the recruitment of school-leavers with A-levels or an equivalent qualification.

The survey also showed that private sector bodies have little confidence when it comes to hiring ex-public sector workers or people who have spent at least six months without a job.

John Longworth, the BCC’s director general, said companies need capable workers in order to remain competitive and many SMEs want to expand their workforce but are struggling to find candidates with the right skills.

We have record youth unemployment and yet companies feel our education system is not equipping young people with the basic literacy and numeracy skills they need to survive in the world of work. Furthermore, employers feel that youngsters are lacking in the ‘softer’ skills, such as communication and timekeeping, which are essential to a successful work environment.

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Umbrella company contractors will be pleased to learn that despite the global economic turmoil, their rates have managed to increase.

The average hourly rate for contractors with the ten most requested skills rose from £30.84 at the end of the first half of 2011 to £31.25 now. Although this may seem to be a modest rise at just over 1%, it is still an increase.

London and the South East of England appear much healthier than the rest of the UK, and the private sector is in much better shape than the public sector.

ReThink Recruitment recently released data claiming that 40% of new roles for IT contractors are based in London. Before the recession, only a third of IT contractor roles were based in London.

Matthew Brown, the MD of Giant, pointed out that a third of contractors expect the financial services sector will create a large proportion of jobs over the next 12 months, and a lot of these companies are based either in the City or the South East. Banks are looking to increase their productivity and demand for people with cloud computing skills has risen sharply.

APSCo claims that demand across the finance sector has shot up by 65% in the past year, mainly driven by concerns over regulatory compliance.

It will come as no surprise to learn that IT contractors in the public sector are not so confident about future prospects. Only 9% believe the public sector will create more IT roles than the private sector in the coming year.

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Despite the slow growth in the UK economy, contractors such as those working through umbrella companies are doing surprisingly well, according to a new survey by the PCG.

The PCG polled 2,000 freelancers and discovered that in the last twelve months, 75% of them have been under contract for at least eleven of them. 84% of the survey’s respondents said they expected business opportunities to remain the same or improve in the coming months.

The MD of the PCG, John Brazier, said he was in no way surprised at the results because freelancers can help accelerate the economy while UK PlC is getting back on its feet.

He went on to say that although public sector opportunities are drying up, PCG members have proved that they are adaptable and secured private sector contracts. However, in order for the freelance community to deliver its full potential, the government must address the problem of red tape and reduce the amount of regulations.

Whilst life is good for the majority of freelancers and contractors, nearly 25% of SMEs saw their pre-tax profits drop by 50% in the last financial year.

The SME Distress Monitor, from Baker Tilly, also shows that nearly 10% of companies that filed accounts last year saw their sales decrease by more than 30%.

Sarah Batchelor, from Baker Tilly, said the research demonstrated that short-term debt pressures are having a really bad effect on SMEs. As cash-flow tightens, business owners must take action at the earliest possible opportunity to make the best of available financial options to stave off problems in the future.

The current economic outlook is far from stable and it is crucial that SMEs seek advice and implement safeguards if they are going to survive, she added.

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The private sector is now using nearly as many interims as it did before the recession, according to the Interim Management Association.

The IMA commissions a quarterly survey on interim usage in the public and private sectors and in Q2 it found that private sector bodies were responsible for 61% of interim and umbrella company contractor assignments. The strongest sector for high-end interims was banking and finance which accounted for 40% of all private assignments.

The chair of the IMA, Jason Atkinson, said the private sector buoyancy is welcome and shows that companies are using specialist resources in their bid to drive the economic recovery and enable growth. Businesses are showing an increased willingness to take on interims with bespoke skills for gap management and transitional change projects.

Spending cuts have impacted on resources in the public sector but changes have also been made in the framework agreements for interim providers. Those who did not make the grade have seen a reduction in the number of assignments they receive. On the other hand, IMA members who did pass muster are finding that the public sector side of their business is growing.

The latest JobsOutlook from the REC suggests that most employers will maintain their current level of temporary employees for at least the next three months.

61% of employers said they intend to keep the same level of temps, and 22% actually expect to increase the number of agency staff they use in the coming three months. Over the longer term, 86% of employers said they intend to either maintain to increase the amount of temps they use over the coming 12 months.

Whilst the outlook looks good for temporary workers, things aren’t so positive for those looking for a permanent position. Only 53% of employers intend to take on more permanent staff in the next three months, down from 67% last month.

Roger Tweedy, the director of research at the REC, commented on the results saying that a complex picture was now emerging about hiring intentions. The jobs market has suffered from a dip in business and consumer confidence this month. But despite the forthcoming implementation of AWR, employers are still keen to have a flexible workforce while uncertainty remains in the jobs market.

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New data suggests that the UK’s small business owners are leading the country towards economic recovery.

Figures released recently by the recruitment firm Manpower show that it is the smaller enterprises, including those that need umbrella company contractors, that are creating new job opportunities and not their larger counterparts. Manpower’s latest Employment Outlook shows an increase of 8% in the hiring intentions of small firms over the next three months.

Mark Cahill, the managing director of Manpower UK, said that despite ongoing concerns about the UK economy, the outlook for employment is at its most positive for three years.

Candidates often assume that the bigger the firm the better when it comes to job vacancies, but these figures suggest that small really is beautiful. There is still huge unmet demand for candidates to fill skills shortage roles, such as IT specialists and engineers, he continued.

Another report, this time from ECI Partners, claims that small business owners are confident about the future prospects for their company and anticipate growing in the next year.

74% of respondents to the Growth Survey expect their headcount to rise in the next 12 months and 50% said that growth will exceed 5%. In a further sign of optimism, 60% expect to see a double digit rise in turnover.

Business and enterprise minister, Mark Prisk, commented on the report saying it was good news that so many small enterprises expect to recruit and see their profits increasing. The government is committed to helping private sector businesses create jobs, and to support them we’re reducing taxation on business, tackling onerous bureaucracy and backing start-ups, he added.

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As public sector redundancies really start to bite, more women public sector workers could be tempted to go it alone and either set up their own business or become an umbrella company contractor.

Over the last ten years, the number of women working in the public sector has risen at a faster rate than it has for men, according to the TUC. As public sector job cuts increase, so female unemployment will rise, the organisation explained, and this at a time when female unemployment is at its highest level in 23 years.

Brendan Barber, the general secretary of the TUC, pointed out that we are already starting to see the affects of public sector cuts and areas with a high concentration of public sector employment are already feeling the pain. George Osborne’s plans to create jobs are woefully inadequate and complacency over economic growth is coming back to haunt us, he added.

Despite continuing uncertainty in the sector, many public sector workers would rather stay put than transfer to the private sector, according to Badenoch & Clark recruitment consultants.

Its survey found that two thirds of workers in the public sector are sitting tight in their present role. 15% want to stay because of better benefits but around 50% said their length of service made them reluctant to leave.

The MD of Badenoch & Clark, Nicola Linkleter, said public sector employers need to support and nurture this sentiment. They should be identifying and rewarding top talent to make sure they keep hold of key employees and are in a position to attract external talent in the future.

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Graduates struggling to find a full-time job after leaving university may decide that setting up their own business is an attractive alternative.

According to research by the Higher Education Statistics Agency, graduates are waiting up to three and a half years to secure a full-time position. The HESA surveyed 49,065 people who graduated in 2007 and discovered that 28% of them were working part-time last year. 3.5% of respondents said their status was “other” which HESA interpreted as meaning unemployed.

The general secretary of the University and College Union, Sally Hunt, said it was worrying that an increasing number of graduates remain without a job. It’s now even harder to secure employment and new students coming into a system which charges the highest university fees in entire world deserve to have better prospects. Countries which invest in their graduates will be the ones that reap the rewards.

Another study, this time from totaljobs.com has found that only 9% of graduates would rather work in the public sector than in the charity or private sector.

This does seem to be surprising considering the amount of time it takes to find a job. Totaljobs.com’s graduate director, Mike Fetters, explained that the public sector was a top destination for graduates a few years ago and there are still opportunities available despite the spending cuts. He went on to say that the public sector offers career progression and good training and graduates should at least consider the wide range of opportunities available.

The survey also found that 82% of graduate jobseekers think the jobs market is now tougher than it was a couple of years ago.

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Recent research findings from Badenoch & Clark show that nearly 67% of public workers have decided to remain in their current position and 31% say they are happy in their current role. Yorkshire has the highest percentage of content employees at 44.7%.

The professional recruitment agency surveyed 1,000 public sector employees and found that almost 15% are attracted to public sector benefits such as pensions. A further 41% say their length of service makes them reluctant to leave, and this figure increased to 51% of public sector employees in the North East of England. 38.3% of public sector workers said making a difference was the prime motivator to remain in their role.

Nicola Linkleter, the MD of Badenoch & Clark, said these results show that a lot of public sector workers still have a sense of belonging despite the unprecedented changes that have affected the sector in recent months.

Employees who have been in the same role for some years are fearful of change, but the work/life balance that comes with working in the public sector and the sense of purpose they get from their employment encourages many to stay. Benefits, such as pensions, still rank highly but there are some even stronger drivers to retain staff within the sector.

It’s now up to public sector employers to support and nurture their staff throughout the period of change and acknowledge their expertise and commitment. Employers must reward top talent if they want to keep hold of their key employees and attract external talent in the future, she concluded.

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A new report from APSCo suggests that temporary workers might be in for a hard time in the next few months.

Recently, the jobs market for long-term umbrella contractors and permanent workers has been buoyant, but demand for temporary workers across a range of sectors has decreased.

In April, demand for science and technology temps dropped by 18% and HR positions decreased by 14%. Sales and retail temporary vacancies fell by 9% and short-term opportunities in banking and finance were down 8%.

The chief executive of APSCo, Ann Swain, said economists have been fretting over the fragile employment market for some time and although unemployment has not reached the 3 million figure  some had feared, there is still a great deal of uncertainty.

The jobs market has not yet felt the full impact of recent public sector redundancies and it is unsure whether the private sector recovery will be strong enough to absorb public sector job losses.

Meanwhile, the CIPD and Hays Recruitment have published the results of their “Resourcing and Talent Planning Annual Survey”.

The results show that small businesses continue to struggle to find candidates with relevant skills even though they receive numerous applications for every post. 75% of respondents reported problems over the past year, up 7 percentage points on 2010.

It would appear that small firms are increasingly turning to umbrella contractors to satisfy the talent shortage in their business. 29% of businesses said contractors were a core part of their talent planning and 62% think demand for contractors will increase.

Companies are still reluctant to take on permanent staff due to continued economic uncertainty and this has to spell good news for highly skilled temps and contractors.

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