The latest Report on jobs from the REC/KPMG suggests that AWR might after all be having an affect on temporary recruitment. If that were to be true, it could be a matter of concern for umbrella company contractors.

Permanent placements increased for the third consecutive month in March, but temporary billings recorded a decrease. Although the decline was moderate, it was the fastest in more than two-and-a-half years. A lot of panel members reported that employers were converting temps into permanent members of staff because of the effects of AWR.

Demand for IT contractors dropped from 53.9 in February to 52.5 last month, but the report says the IT/Computing sector does continue to perform well.

March saw an increased demand for staff, with strong growth in permanent vacancies offsetting the slower rise in temporary contracts. However, growth in candidate availability did not rise to match the demand, which should spell good news for job seekers.

Tom Hadley from the REC said the latest figures were encouraging, but there is still a need to address the skills gap. Employers continue to struggle to find candidates with the requisite skills in catering, driving, engineering and IT and the Government needs to address this lack of supply.

Commenting on the decline in temporary worker appointments he said this could be due to continued uncertainty over AWR, but it could also be because employers are regaining their business confidence. The advantages of flexible staffing arrangements are well known and the outlook for temporary workers is still largely positive.

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Recruitment agency Adecco recently said that the number of job vacancies was on the increase last month, news that will no doubt delight IT umbrella company contractors.

In fact, the IT sector recorded a 3% increase in job vacancies in March. Furthermore, in a complete reversal of recent trends, the public sector showed a 2% rise in job vacancies. Many of these opportunities were for temporary contracts.

Adecco’s MD, Steven Kirkpatrick, said AWR did not appear to have adversely affected temporary opportunities. There was a slight decline in the number of temporary roles advertised in January, but as this was only minimal it suggests that UK businesses have not changed the way they recruit.

ScotlandIS, the trade body, also recently reported that the technology sector north of the border is still expanding and there remains a high demand for suitably qualified individuals.

Yet another report, this time from ContractorCalculator, shows that the engineering and management sectors are also on the lookout for umbrella company contractors.

There is a general skills shortage in engineering and businesses that are recovering from the recession are now looking to increase their investment in infrastructure and energy projects. Employers also believe that IT contractors can provide them with a competitive advantage when economic conditions remain tough.

The report also pointed out that a third of interim management contracts towards the end of last year were in the public sector, which backs up the Adecco claim that the public sector is staging something of a comeback.

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A new study by ReThink Recruitment suggests that IT contractors will soon need to work harder for their money.

Almost 90% of IT directors are expecting to see workloads increase but only 39% expect their budget to increase accordingly. This will be the third consecutive year when workloads outstrip budget increases and this has led directors to worry that they will be unable to deliver business-critical projects.

Michael Bennett, a director at ReThink, explained that organisations are focusing on their balance sheet and expecting wider productivity gains for less expenditure and this is piling an increasing amount of stress on everybody who works in IT. Contractors now have to work extra hours in order to meet unrealistic deadlines, but they are not receiving any additional money for doing so.

ReThink surveyed IT directors with at least 250 members of staff and discovered that years of budget austerity are taking their toll on IT departments. IT heads report that downward pressure on pay is making it difficult for them to retain key talent. In previous years, companies could offer financial incentives to keep skilled umbrella company contractors but this is no longer the case and competitors are stepping in and poaching key staff.

The recruiter believes that companies need to do more to motivate and engage with talented individuals if they want to retain them.

As far as budgets go, 43% of IT departments saw their budget increase last year, up four percentage points on 2010, whilst 32% saw their budget decrease, up three percentage points on the previous year.

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The government still hasn’t managed to fine tune the clearance system to make sure it gets the best value IT contractors for sensitive projects.

Ministers have been accused of operating a closed shop when it comes to sensitive projects because only contractors who already hold a valid clearance certificate are let in.

Michael Shryance, the head of the national security secretariat, said recently that the Cabinet Office is committed to addressing circumstances where vacancies specify that security clearance is a pre-requisite.

In response to a criticism levelled by the PCG last October, Shryance said he shared the Group’s concerns that some contractors may be excluded by this bad practice. He also admitted that the government was not getting the best value from sub-contractors.

The latest government guidance states that candidates should only be required to hold valid security clearance at the application stage in exceptional circumstances. Despite this, the PCG found that many top workers are still blocked from contracts they deserve, in favour of people who already hold clearance.

It’s something of a Catch 22 situation, but Mr Shryane said it was impractical to put all vetting procedures on a statutory footing, although it would be worth exploring the policy objectives. It would also be worth drawing up a Code of Practice and make adhering to it a requirement for recruitment and procurement professionals who want to gain other forms of certification.

He also welcomed the PCG’s proposal to start a Security Clearance Forum. This would monitor the actions of recruiters and clients and would be a welcome “challenge function”, he said.

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Umbrella company contractors north of the border will be pleased to learn that demand for their services continues to rise. The latest PMI shows that growth reached its highest level for four years in February and plenty of job opportunities are springing up for job seekers.

This welcome news came from the Bank of Scotland, which said the country is continuing to see “bountiful work” opportunities. The service sector demonstrated strong growth with its PMI increasing from 51.4 in January to 51.7 last month. That’s the 14th consecutive month when the PMI has increased, and that indicates positive times ahead.

Donald MacRae, the chief economist at the Bank of Scotland, said it was encouraging to see that the private sector still maintained a positive track after the financial meltdown. Both manufacturing and services registered increased output last month and increased recruitment in the service sector ensured the number of people in work grew at the fastest rate for four years. The latest results confirm that there is less likelihood of a double dip recession and Scotland should be able to look forward to a stronger recovery this year, he added.

After last week’s dismal employment statistics from the ONS, any positive news must come as a welcome respite to contractors. Scotland does seem to be well placed to recover, especially for contractors with experience in manufacturing, services or renewables.

Contractors in other parts of the UK may take solace from the fact that the BCC now says we are unlikely to slip back into recession.

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There aren’t enough female IT contractors according to the Chartered Institute for IT, and that’s despite the sector being one of the fastest growing in the UK.

Gillian Arnold, the chair of BCSWomen, pointed out that virtually everyone relies on IT in their everyday lives and yet few women are involved in the design and development of the systems we use on a daily basis. However, some key IT employers are now moving in the right direction towards the recruitment and retention of women in the industry.

Currently women make up a mere 19% of the UK’s IT workforce, putting us well behind other European countries on gender representation. Furthermore, women in top IT roles get paid nearly 30% less than men holding comparable managerial positions.

BCSWomen says that more work must be done to promote the benefits of working in the IT sector and support should be made available to women who want to return to the workplace after taking a career break.

FTSE 100 boardrooms are still predominantly male dominated. The split is 85.8% male to just 14.2% female. Believe it or not, this is actually an improvement, but there are still plenty of talented women out there who could hold senior positions.

In order to be successful in today’s ever changing times, senior IT managers need to possess both technical and softer skills, but the right candidates can come from a diverse range of backgrounds, Ms Arnold added.

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Four months after the AWR were implemented there is still an area of uncertainty surrounding the position of limited company contractors.

The AWR summit last week discovered that the recruitment sector is divided as to whether or not limited company contractors are inside the scope of the Regulations. About 100 delegates attended the summit and the split was roughly 50:50 when the question arose.

Even members of the panel appeared to have differing views on the subject. Tim Johnson, head of Tim Johnson Law, told attendees that workers need to have an employment contract, or agree to work personally with an agency, before they come under Agency Workers Regulations. However, company contractors do not enter into such a contract, nor do they personally agree to carry out the work, and therefore they are not affected by AWR.

Kevin Green, the REC’s chief executive, on the other hand said that limited company contractors are not automatically outside AWR, although their status was good evidence to suggest that they might be.

Other members of the panel believed that the acid test was whether a worker was outwith IR35. If so, they were likely to also be outside AWR.

Some recruiters have complained that temporary staff are having their contracts terminated before the qualifying twelve week period is up whereas prior to AWR the contract would have continued. One recruiter has suggested that temps either be allowed to opt out of AWR, or the 12 week qualifying period is extended, so that they can remain in employment.

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Contractors might want to consider acquiring renewable energy skills after it was announced that 10,000 new direct jobs could be created in tidal and wave power by 2020.

The UK’s first Marine Energy Park will be located in the southwest, stretching from Bristol to the Isles of Scilly.

RenewableUK’s recent report entitled ‘Channelling the Energy’ claims that the UK’s existing skills base will not be able to deliver the growth the industry needs. However, it goes on to say that the problem can be resolved.

Small steps are already being taken. In 2010, the Renewables Training Network, a joint initiative between the government and the renewables sector, set up a wind turbine service technician apprenticeship.

David Green, a director of the Network, said that geography is one of the major challenges when it comes to sourcing talent for remote projects. However, contractors with a strong background in electrical and mechanical engineering have the cross sector skills necessary to transition into the renewable sector.

David Blake from recruitment firm Allen & York recently explained that the renewable energy sector was already suffering from a shortage of talent, but specialist recruiters should be able to source candidates from outside the industry and offer them realistic advice.

He went on to say that the best sources of talent are currently the aerospace, energy and oil and gas industries. There is also available talent in some European countries.

Graduates can also now receive training in wave energy and windmill technology thanks to an investment of £6.5 million from the BIS.

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Contractors working in HR and IT could see a growth in opportunities this year.

Adecco recently said that we can expect to see gradual jobs growth this year, led by the HR and IT sectors. The Olympics will also provide a welcome boost to the market.

The recruiter’s Job Watch survey showed that hiring slowed down considerably towards the end of last year. Despite the festive season, temporary recruitment in the retail sector actually declined, but permanent hiring increased. The survey also showed that the HR and IT sectors demonstrated tentative growth in the last couple of months of 2011.

Adecco’s MD, Steven Kirkpatrick, said jobs still exist and jobseekers shouldn’t give up. It is important for them to boost their chances by considering all the options, successfully marketing their skills and searching for opportunities.

The Olympic and Paralympic Games will create ten of thousands of opportunities, which will give jobseekers the opportunity to apply for a position outwith their usual sector and help them gain new skills and valuable experience.

SMEs also need to ready themselves for the possible disruption caused by the Games. BT recently surveyed 600 SMEs and discovered that 30% have not yet thought about disruption to the supply chain process during the Games, nor have they considered staffing levels.

Even SMEs who are not directly affected could have customers or suppliers in London who will be impacted by the Games. Furthermore, more than 33% of businesses think they might have staffing problems when employees are either unable to get to work, or want time off during the Olympics.

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Umbrella contractors may be interested to learn that the Reed Job Index ended 2011 with 17% more job vacancies than the year before.

However, the Job Index ended the year on 121 after falling significantly in December. In November the Index registered 133, a slight increase on the previous month’s 129.

Not surprisingly in light of the government’s spending cuts, the public sector registered the least opportunities. The Index dropped to 36 in December, down from 42 in the comparable month of 2010.

Vacancies in hospitality and catering registered a month-on-month increase of 9 points, whilst opportunities in purchasing and safety & security both rose by 1 point. The engineering sector registered the most significant year-on-year increase – up by 64 points. IT and telecoms came in second with a rise of 50. The biggest losers were banking at -41 and education at -10.

The MD of reed.co.uk, Martin Warnes, said the results are particularly striking when you consider the economic turmoil of recent months. Recruitment activity traditionally drops off in December but it is significant that the number of available opportunities still managed to end the year 17% higher than in 2010.

He went on to point out that skilled technical staff in sectors such as engineering have been much in demand, as have those with skills in IT and telecommunications. IT contractors may be able to take solace from these figures and look forward to a bright future in 2012.

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Umbrella company contractors with international skills could find themselves in demand after Vince Cable said people with such skills were in short supply.

During a speech to the British Council, the business minister pointed out that companies need staff with cultural awareness, linguistic abilities and overseas experience if the UK is to achieve sustainable economic growth. In order to ensure this, the workforce in the UK must understand that globalisation is important to their careers and that without these skills we will be less likely to be a competitive force on the international stage.

Cable went on to say that at the moment the UK firms are not well enough equipped to conduct international business at the required level. We currently have a situation where companies that trade with other cultures are having difficulties recruiting staff.

He urged British businesses to make sure they have the staff with the skills necessary to conduct business overseas, export goods and services and attract inward investment.

Not only do we not have people with the right skills to do business overseas, it also transpires that British SMEs lag behind their European counterparts when it comes to e-commerce.

Research from the Epson Business council has discovered that just 59% of small firms in the UK think e-commerce provides them with a business opportunity. Across Europe as a whole, the figure is 72%. One in three SMEs in the UK think e-commerce channels threaten their business and although 78% do sell their products or services over the Internet, countries such as Italy have a much larger e-commerce presence.

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We’re continually hearing gloomy predictions about UK economic growth and demand for contractors in many sectors has been decreasing recently.

However, that could be changing. The Reed recruitment agency has released the results of its October Jobs Index survey, which reveals the largest month on month increase in job opportunities for almost two years.

The accountancy, IT, marketing and sales sectors all saw impressive increases, and although public sector demand is still low, it increased by nine points in to end October with a reading of 66.

The Reed Job Index began in December 2009 and a baseline figure was set at 100. October’s reading was 129 indicating that demand has risen by 29% in the two-year period.

Demand in the voluntary sector increased by an impressive 43 points, whilst the IT sector rose by 24 points to end the month on 173. PAYE umbrella company contractors also saw 2.5% more temporary opportunities in October than they did in September.

Tim Lovell, Reed’s Group MD, said the October Jobs Index recorded the best month-on-month increase in employment vacancies since the index began, with all 12 UK areas witnessing at least some growth.

He went on to point out that the North/South divide that we hear so much about is not as clear cut as some would make out. Last month, there was particularly strong growth in opportunities for candidates in Yorkshire and Humberside and London.

Salaries remained pretty much unchanged in October and the Reed Salary Index now reads 97, indicating a 3% decrease since December 2009. However, the retail and leisure and tourism sectors did record increases – up to 116 and 102 respectively.

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