Are businesses moving away from permanent staff?

Posted on Tuesday, November 28, 2017 by MSS TeamNo comments

The British economy is a rapidly fluctuating entity. With the value of GBP, overall employment levels, and even staffing trends shifting on an almost daily basis, businesses are hard-pressed to identify staffing trends. Moreover, organisations simply do not have the time to investigate further. Apprenticeships, for example, have now fallen by 59% following the introduction of the Apprenticeship Levy.

The programme was designed to increase the number of people training at work through raising £2.5bn per year through what is essentially an extra tax. Backfiring spectacularly, what once drew in 117,000 apprentices (2016) now saw a paltry 48,000 joining the workforce through an apprenticeship scheme.

Due to this level of uncertainty, organisations across the UK are beginning to move away from permanent staff. This often takes the form of gig economy workers, as seen with Deliveroo, Uber (for now) and JustEat. On a more professional basis, workers can often take on contract roles – engineering is a prime example of this, with skilled talent moving between locations on a project basis. This option offers a huge amount of benefit for businesses, but also a more attractive pay packet for those workers willing to embrace it.

In addition to these categories, the traditional interpretation of the ‘temporary worker’ is still alive and well – monthly or even yearly placements are undertaken to fill a gap or to work on a short-term project. Non-permanent staff, therefore, occupy a productive space in today’s economy – one which fits our changing attitude to risk, and greater fluctuations in markets.

Bucking this trend, however, is the demand for permanent staff in Scotland – particularly within its IT and computing sectors. The latest IHS Markit Report on Jobs has shown the “fastest rise in Scotland since 2015.” In contrast, the availability of permanent staff fell sharply in line with the current industry skills shortage. For employees, however, this has resulted in a significant pay rise. You would be forgiven, then, for believing this resurgence of demand for permanent staff was representative of the UK as a whole.

Kevin Green, Chief Executive of the Recruitment and Employment Confederation, confirmed that “It's good news for jobseekers in Scotland as salaries for those starting new jobs are still on the rise. At the same time, recruiters have again been successful in helping more people find permanent roles. This also means that Scotland is doing better than the rest of the UK, as the growth of permanent placements across the country is slowing.”

Across the UK, however, a different picture is painted entirely, with significantly lower growth of permanent roles, as employees increasingly favour contract, temporary or gig-economy based work. The finance sector, for example, saw the number of contractors on assignment rise by 14%. A significant boost indeed.

For organisations seeking the newest addition to their team, this results in something of a conundrum. Organisations must now question not only where the right staff can be found, but where they can be found at an appropriate budget. The answer, then, can only come from industry experience and significant time investment. It’s a certainty of today’s fluctuating market that finding the right staff is becoming increasingly difficult.

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