This week’s release of the latest set of unemployment figures precipitated the usual flurry of headlines which tended to be divided along political lines. Those in favor of the government’s economic policies hailed the highest number of people in work since records began (coming in at £29.7m), the fall in unemployment of 14,000, and the drop in the claimant count by a further 12 500. On the face of it this seems an unambiguous set of positive data. However, opponents of the government seized upon the fact that average earnings growth (excluding bonuses) grew by only 1.3%, well below the inflation rate of 2.7% and focused on the continuing issues surrounding youth unemployment.
Additionally most analysts continue to be puzzled by the robustness in employment in the face of a stagnant economy, coming to the conclusion that because of the lack of wage rises we are simply ‘getting less ‘bang for our buck’.’
Rather than take a stance on the effectiveness or lack thereof of government policy I felt that it might be of interest to give the (admittedly microcosmic) view of an employment agency. In our industry I would fall short of proclaiming a boom in employment and a total squeeze on wages/rates. However, we continue to see that banks are willing to pay good money for the right resource. What that means in reality is that the money is being directed at purely business critical programmes (this continues on the whole to mean regulatory driven programmes) and that clients are willing to look more carefully at ensuring they hire the right people. For many clients this has meant moving towards a greater proportion of interim resource, giving them much greater freedom to retain or release high quality individuals upon the successful completion of programmes.
This may seem like the banks continue to hold all the cards (and to a large extent they do), however the boon for the individuals concerned is the greater financial rewards that can be gained in contracting. I do not seek to overly simplify the current set of circumstances; I have heard of too many stories from those struggling to find work to paint an entirely rosy picture and I am fully aware that contracting also has its drawbacks. Nevertheless lower unemployment figures can only be a good thing and whilst there is downward pressure on incomes this is surely better than long dole queues.
If this view reflects your experience or seems an inaccurate depiction of your observations of the market then I would be very keen to understand your thoughts.