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Report on Jobs - March 2016

18/04/16 Peter Livingstone Director

Permanent hiring slows as contractor hiring accelerates’

Key Highlights:

• Over the last quarter permanent hiring has continued to grow
• Softer growth of demand for staff
• Vacancy growth eases to 33-month low
• Temporary/contract staff availability declined at the slowest pace in two-and-a half years
• No. of people placed in permanent jobs increased further during March
• The strongest rate of permanent growth was indicated for Executive/Professional workers, with I.T and Computing ranking 3rd and Engineering ranking 6th

According to the Recruitment and Employment Confederation’s (REC) & KPMG Report on Jobs for March 2016, the increase in permanent placements has hit a six-month low, while temporary and contract staff billings rose at the sharpest pace in four months; this increase was broad across the nation, with particular prominence in the Midlands. This month report also noted that demand for staff is generally plateauing, with job vacancies - both permanent and contract - at it’s lowest for 33 months.

Specialist contractors especially with the IT, engineering and technical sectors are benefitting from the economic uncertainty as firms maintain capacity to meet rising demand without leaving themselves vulnerable in the event of an unfavourable outcome in the upcoming EU referendum. Uncertainty around a possible Brexit make it likely that there will be a slower growth in permanent staff hiring with employers taking a ‘wait-to-see approach’

Meanwhile, vacancies continued to rise throughout March, although the rate of expansion was the lowest since June 2013. Similarly, the rate of decline in contractor availability was the least marked in two-and-a-half years. Whilst this indicates that skills shortage pressures are ongoing, pressures appear to be easing slightly.

Despite this, the most recent findings from the REC’s Jobs Outlook for March suggest that engineering contractor demand is likely to pick up, with clients expecting to see significant recruiting challenges in this area in the near future.

Peter Livingstone – Redline Contracts Manager commented “UK Taxation appears to be the 2016 hot topic in contract & interim recruitment with extensive changes happening around both travel and subsistence relief and limited company dividends. This means that tax relief for work-to-home travel expenses will be no longer available to umbrella or limited company workers if there is a ‘SDC’ (Supervision, Direction or Control) of the person. With changes in the dividend regime such as there will be no more grossing up of dividends and claiming back of a notional credit. All these rises in taxation will affect not just contractors, but anyone who works through a limited company, because directors will be forced to pay 7.5% more tax on any dividend payments. Currently demand for contract and interim staff continues to currently grow for both specialist design engineer jobs and manufacturing and operations jobs but rates are rising as contractors endeavour to offset increasing costs and reductions in earnings”.

For more information on Redline Group's Contracts Division, please contact Peter Livingstone, Head of Contracts on 01582 878852 or email