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impact of hung parliament contractor market

Despite hung parliament, contractors shouldn’t be unduly concerned about uncertainty

With the recent election producing a hung parliament, many contractors will be nervous that the uncertainty the result has generated will damage the economy.

However, contractors can also be relieved that recent news suggests there is strong demand for their services.

At the end of last month, the Recruitment & Employment Confederation (REC) published its JobsOutlook survey, which found that 89% of employers plan to increase or maintain their temporary headcount over the next quarter, up from 80% in the March 2017 survey.

This study also found that nearly half of businesses anticipate a shortage of candidates to fill permanent roles in the next year, with construction, engineering & technical and health & social care named particular areas of concern. Again, this points to potential opportunities for contractors.

The REC also found that the four weeks leading up to June enjoyed the highest demand for IT contractors so far this year – with demand higher than any month in 2016.

The REC identified a number of factors driving this demand, including EU staff leaving the UK following the Brexit vote, a shortage of cyber-security skills and an NHS reliant on short-term expertise.

It seems likely that the recent ransomware attack that hit the NHS will only further underline the need to recruit contractors with specialist IT skills.

While these figures were published before the election, they should offer a degree of comfort to contractors, especially since it’s not necessarily the case that the uncertainty caused by the hung parliament will reduce contracting opportunities

Instead, employers might respond to this result by avoiding taking on permanent hires and opting for temporary staff who represent less of a commitment in uncertain times.

Here at Contracting Scout, we’ll continue monitoring the state of the market and assessing the extent to which the election will impact contractors. If you have any concerns in the meantime, please do get in touch.