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UK – Employers hire more contractors, engineering remains bright spot

29 April 2013

The UK Government's continued investment in infrastructure has boosted temporary employment levels across the engineering sector, according to joint research by the Association of Professional Staffing Companies (APSCo) and Staffing Industry Analysts.

The latest hiring trends show a mixed picture for engineering with temporary employment faring better than permanent employment.  Last month, both permanent placements and vacancies within the sector dropped year-on-year by -4.7% and -8.6% respectively.  But temporary placements rose by +2% since March 2012 and +1% since February 2013.

The research also notes a regional divide. Online recruitment statistics indicate that contract placements in Scotland have rocketed by +33% since March 2012. In contrast, the South East has seen a -15% fall in assignments.

APSCo chief executive Ann Swain said that engineering remained one of the few bright spots within the professional recruitment market. “This is being fuelled by initiatives like the HS2 rail link project, Crossrail and the expansion of Heathrow Airport which has created huge demand for highly specialist engineers and project managers,” she said.

“This vast investment in infrastructure projects has resulted in businesses turning to contract professionals which offers not only a level of flexibility, but also negates the need for permanent headcount cost.”

The data also shows that permanent jobs are increasingly being replaced with contract roles.  Last month, temporary placements rose by +5% year-on-year. Permanent placements were down by almost -7%, indicating a continued lack of employer confidence.

“It's not surprising given the uncertainty surrounding the economy that employers are rather reluctant to commit to increasing their permanent headcount at the moment,” said John Nurthen, Executive Director International Development from Staffing Industry Analysts.

“While the latest GDP growth estimate of +0.3% released by the ONS means the UK avoided slipping into recession again by a slim margin, the very fragile growth will not likely lead to much improvement in business confidence.

“With the UK economy flatlining for the past 18 months, the use of contingent workers is an essential mechanism enabling employers to react nimbly during such an uncertain period and thereby helps to protect the jobs of the permanent workforce. The UK's flexible job market at least puts it at an advantage compared to its continental neighbours where the use of temporary and contract labour is still hamstrung by excessive regulation.”

Subscribers to Staffing Industry Analysts’ research can download the latest hiring trends report here.

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