Permanent workers preferred over contractors?

Permanent versus temporary employment. It is always a bit of a pendulum. Opportunities for contractors and freelancers wax and wane with the state of the economy like they do for any workers, but opportunities for self employment are particularly fine tuned to what is happening generally in the labour market.

The April situation seems to have favoured permanent positions over contract and other temporary placements according to a survey by the Recruitment and Employment Confederation.

The number of contract opportunities is down slightly and seems to be balanced by a corresponding rise in permanent placements according to the survey. A little worrying for contractors is that the drop in the number of new contracts, although only quantitatively quite small, was still the largest drop for three years.

There was better news for people looking for short term contracts only as the number of vacancies was a little higher in April.

The chief executive at REC, Kevin Green, said that the economy was still pretty fragile and the small changes in opportunities were a reflection of that fragility. He said that rather than take on more staff last year, the tendency was for companies to seek what additional capacity there was within the existing workforce and utilise that as much as possible.

The expectation is that there will be a moderate improvement both in consumer and business confidence later this year and this should have some influence on the amount of opportunities for both contractor and permanent staff placements.

The Agency Workers Regulations are beginning to have some effect on the way in which companies hire staff and this might be part of the reason for the pendulum shifting in the direction of permanent placements, according to Mr. Green.

He also said that the amount of confidence reported above might be affected by continuing reports of a possible double dip recession and the at present unknown developments in the eurozone.

Contradictory news on job opportunities for top notch IT contractors

There seems to be some contradictory news about contractual opportunities for high flying IT contractors with some job agencies reporting higher numbers of contracts while others suggest a down turn.

According to one agency that deals exclusively with IT contractors, the number of opportunities so far has definitely showed a slow down although it was too early to tell whether this was a long term trend or simply a seasonal blip. The associate director at Hudson Recruitment, which specialises in finding jobs for contractors, said that companies were showing increasing reluctance to take on IT contractors except in particular niche areas.

Stuart Rogers said that it appeared that companies were becoming increasingly reluctant to spend money on hiring IT contractors rather than taking on permanent staff. IT recruitment firm ReThink Recruitment indicated a similar story with many of their clients requesting them to search for permanent staff to replace their contractor headcount. The trend appears to be based on cost cutting with companies as saying that it was cheaper to employ permanent staff than contractors. ReThink’s spokesperson said that the latest developments seemed to focus on company needs rather than IT contractor opportunities with IT contractors opting to work longer hours, extend their present assignments rather than look for new ones and accept a lower pay rate.

The contrary news is that the need for contractors is likely to rise again later this year as it becomes more difficult to find permanent staff for particular projects. Both Hudson and ReThink spokespersons agreed that the pendulum is likely to tip towards contractors again in the near future, particularly when companies found it hard to find the sort of skilled personnel on a permanent basis. In contrast to these two recruiters, another IT contractor specialist, SQ Computer Personnel reported that they had found that the number of new openings for IT contractors was significantly greater in March this year than at any time within the previous two years. SQ’s founder, Bernie Potts said hat despite the March figures it was difficult to tell if the overall trend was upwards as he thought that the jobs market for IT contractors was actually quite competitive.

Freelancers - the workforce of the future?

Elance, the online marketplace for freelancers, has just released the results of a survey which seems to suggest that many businesses are turning to freelancers in preference to permanent employees with the trend likely to increase in future.

The survey involved nearly 600 businesses, with 84% of them stating that online work platforms would be likely to vehicle of choice in the future. Almost half of those companies surveyed claimed that they had substantially lowered their costs by using freelancers in their workforce.

The statistics favouring the use of freelancers came thick and fast in the survey with 80% of the companies surveyed saying that they had accomplished faster work completion cycles when using freelancers and nearly 90% saying that they were able to engage or hire freelancers much faster than hiring staff through the normal channels.

Three quarters of those surveyed reckoned that hiring freelancers online gave them a clear competitive advantage and a similar number thought that hiring freelancers was an important part of their business outcomes.

One of Elance’s Vice presidents said that they were “witnessing a revolution” with the growth in the use of online contractors and freelancers. Kjetil Olsen said that the use of freelancers not only significantly reduced labour costs but allowed companies to find talent for short term projects quickly and efficiently without having to initiate and maintain long term arrangements.
The main demand for freelancers seemed to be website developers, graphic designers, online web marketers and content creators.

A spokesman from a digital agency which has been using online freelance talent for some time said that the use of such talent had enabled their business to grow significantly. The Director of Media Lounge, Mike Barnett, said that having to hire workers was a “big financial commitment” and it was difficult to know how long to take on ordinary workers with the sort of part time or temporary nature of the work that the company does. He said that the hiring of freelancers through such sites as Elance was a good solution.

The survey revealed that nearly half of the companies surveyed intended to hire 90% or more of their workforce online in future.