Contractor Demand Drop Softens
While there were fewer work opportunities for contractors again last month, independent professionals will at least be pleased to hear that the rate at which temporary placements declined in June eased considerably when measured against April and May.
This has led the REC who, with KPMG explored the latest hiring data in their monthly Report on Jobs, to predict that the “worst declines are behind us.”
The data, gathered from hundreds of UK recruitment agencies, shows contract and permanent positions fell again in June, as a result of the Coronavirus. However, KPMG’s Vice Chair James Stewart described this as “inevitable”, and instead preferred to focus on the flattening of the curve, which hints at a recovery:
“Despite an inevitable further drop in hiring activity for permanent and temporary staff, it is encouraging to see they both fell at softer rates than seen in April and May. However, the air of uncertainty around the COVID-19 pandemic will linger – and rebuilding confidence in the UK jobs market will take time.”
“Worst declines are behind us”
Neil Carberry of the REC, concurred. He said the latest figures indicate that “the worst declines are behind us.” Mr Carberry did stress, however, that the data suggests “it will be a while yet before we see job placements growing month on month.”
That the recovery will take some time but has at least started was the message KPMG and the REC were keen to convey. Meanwhile, contractors perhaps have more reason to be optimistic, given temporary placements decreased at a slower rate compared to permanent billings.
Alongside these findings, the report highlighted several other issues of importance to contractors.
Staff availability reaches financial crisis levels
In June, the availability of contract and permanent workers increased substantially, at a rate not seen since during the global recession in January 2009. KPMG and the REC cite the rise in redundancies and furloughed workers seeking new roles as the reasons for such an increase in staff supply.
Pay pressures evident
Following a significant drop in the demand for workers throughout the pandemic, rates of pay for temporary and permanent staff remained weak last month. Although, as the report points out, this contraction, while still sharp, wasn’t as severe as the one experienced in May.
When focusing on hiring activity in four of England’s monitored regions, the steepest reduction in both contract and permanent billings was experienced in London, with the Midlands recording the softest. That said, placements fell across the board, following on from last month’s data.
Upturn in blue collar opportunities
While there’s no avoiding the fact that June was another challenging month, there was good news for blue collar contractors. Temporary opportunities in construction and other trades was the only monitored category to register higher demand in June – even if, as the report explains, the rate of growth was “modest.”
Opportunities for contractors working across all other nine areas, including IT and technology, declined. Unsurprisingly, demand for temporary workers in the hospitality industry fell fastest. This is likely to be down to the closure of restaurants and hotels.
The other notable finding from the report was the difference in hiring activity in the public and private sectors. Placements for contractors fell faster in the private sector. This could be due to a stronger need in the public sector for temporary workers, who have been important to the NHS and government departments in recent months.
Summer Statement offers little respite for contractors
Soon after this research was published, the Chancellor of the Exchequer unveiled his ‘Plan for Jobs’ in the Summer Statement. While there was plenty for employees to take away from this, including a Job Retention Bonus that encourages businesses to retain furloughed workers, contractors and the wider self-employed workforce largely missed out on the schemes introduced to kickstart the economic recovery.
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