Nine out of 10 British employers will increase or maintain their temporary workforce as fears of skills shortage continue to make permanent hiring difficult, a new survey has shown.
Amid a tight labour market some 46 per cent of UK employers think they will suffer from a skills shortage in the coming year, according to the Recruitment and Employment Confederation (REC).
The increase in the use of temporary employees comes as a third of companies surveyed said they have no spare capacity within their labour force. Only one in 20 firms said they intended to reduce headcount during the coming quarter.
Kevin Green, REC chief executive, said: “This looks like a tipping point for the jobs market. Faced with chronic skills shortages, some employers are giving up on trying to fill permanent vacancies, and instead looking for temp resource to ensure they have the manpower needed to meet demand.”
Temporary workers can help businesses at peak times, or when a company aims to respond to a short-term growth stimulus.
By many measures the UK labour market is currently historically tight, with unemployment at 4.6 per cent, its lowest level since 1975, while the proportion of working-age adults in employment has reached the highest point on record.
The Bank of England predicts there is further to go, with it expecting unemployment to fall to 4.5 per cent before inflationary wage pressures start to build.
However, the difficulties in attracting talent revealed in surveys suggests recruits could push up their wage demands in skilled sectors.
Green said: “For jobseekers this means there are opportunities out there to boost earnings, because employers are prepared to pay a premium for people to fill vacancies on an interim basis. We could see this become a more attractive option for people in the context of rising inflation and poor pay growth.”