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Almost 70% of recruitment firms report increase in net fee income

New research has revealed that 69% of professional recruitment firms have experienced an increase in net fee income over the last twelve months.

This is slightly down on last year’s figures of 72%, but average annual growth across all respondents remains steady at 29%.

The second annual UK Recruitment Index, conducted jointly by professional services firm Deloitte and freelancer group APSCo, also found that just under half of those questioned plan to expand with new offices, of which 65% of will be opened overseas.

Ann Swain, Chief Executive of APSCo, said: “Last year there was a view that growth was coming – and that it was very much on the agenda  – but that recruitment firms were unsure whether it was going to last.

“This year’s report shows clearly that the growth has not only been achieved – but that it has been sustained – and there is consequently much more confidence in the market.”

There are still great challenges facing the industry though, with the majority of respondents citing lack of talent to cope with sustained growth as the main issue.

Candidate attraction techniques are therefore as important as ever, with Ann Swain describing innovative initiatives as essential to future success.

She said: “Flexible working has moved quite a way up the agenda of what potential recruitment consultants are looking for when they join a firm, and the more forward looking businesses have updated their offerings to accommodate this.”

Security vetting code of practice levels playing field for contractors

A new national security code of practice has been introduced, which should ensure that no contractors are at a disadvantage when applying for jobs within the public sector.

Cabinet Office ‘Guidance on personnel security controls’, released earlier this month, states that no workers should be expected to hold security clearance before they can be put forward for sensitive positions.

Formally, contractors who had previously held a similar temporary appointment within the sector were at a distinct advantage.

A Cabinet Office spokesperson said: “Job opportunities should not be limited because an existing security clearance is requested as part of the selection criteria.

“All recruiters are expected to abide by the code of practice and ensure that individuals are not unfairly excluded from employment.”

The code was developed by the IPSE Security Clearance Forum, in response to changes to national security vetting announced by the government in 2010.

Simon McVicker, IPSE Director of Policy and External Affairs, is optimistic about its implementation. He said: “We now have a code of practice that goes a long way to ensuring a level playing field for all contractors.

“IPSE will continue to closely monitor client and agency behaviour to ensure the code is adhered to, and we will be working closely with the Forum to guarantee action is taken against any misconduct that takes place in the future.”

Curriculum changes should increase contractor demand

Changes announced to the UK’s schooling curriculum look set to boost contractors’ earnings over the next twelve months.

A new survey by Giant Group found that 79% of contractors within the education sector expect their earnings to increase or stay the same over the next year; a growth of 5% on figures from last year.

This is partly due to expected skills shortages when the IT syllabus is altered to include programming and coding for both primary and secondary school pupils.

Children as young as five will be expected to have an understanding of algorithms and be able to both create and debug simple programs.

Managing Director of Giant Group, Matthew Brown, said: “(This addition) to the UK syllabus has boosted demand for skill sets in these niche areas and therefore contractors with these attributes are now expecting a rise in earnings over the next year.

“Specialists are particularly sought after to plug gaps and to generally smoothen processes for education providers.

“We’re all aware that adding new subjects is likely to bring staffing issues and many schools are looking to employ contractors to ease the transition.”

However, not all findings from the study are so positive. In particular, 70% of respondents have only taken one contract role over the last year, and there’s been an increase in contractors reporting an average gap of 0-31 days between assignments.

Contractor pay rates rise to seven-year high

A shortage of skills and a slump in the permanent recruitment sector has contributed to a steady rise in contractor billings and pay rates are set at a seven-year high.

The Recruitment and Employment Confederation (REC) ‘Report on Jobs’ highlighted that agencies’ contract staff billings rose at an accelerated pace for the seventeenth month in a row. This contrasts with a ten-month low in the rate of growth for permanent placements.

Kevin Green, REC chief executive, said: “Employers are bringing in temps and contractors with the skills they need quickly and are willing to pay to do so.”

Temporary workers within the nursing and medical sectors remain the highest in demand, though those with engineering experience follow closely behind.

Bernard Brown, Partner and Head of Business Services at KPMG, attributes this growth to a shift in attitudes. He said: “With permanent placements slowing to a ten month low, perhaps the uncertainty caused by political crises across the globe are beginning to affect decision-makers’ confidence.

“The incentive for taking on temporary roles is strengthening as pay packets improve, and if the cost of living continues to rise as expected, we may yet see candidates forced to choose between securing financial rewards in short bursts or long-term security.”

The Midlands currently boasts the greatest growth of temporary billings, whereas the south of England has facilitated the weakest expansion.