Global Market Sentiment for Contractors
The demand for contractors has experienced record growth, steadily increasing in most regions despite global economic downturns. Demand and anticipated trends nonetheless differ based on both industry and region.
Global Increases in Contracting Work
In general, almost all regions have experienced an upswing in contractors. REC’s latest Report on Jobs saw an increased demand for almost all types of contractors, especially those in engineering. Most market analysts anticipate the trend to continue, and for the skills shortage in many industries to continue outpacing the number of available specialists.
An analysis by Plunkett Research suggested that, even when business had seen a drop, executives are still willing to invest in new consulting projects. As a result, global consulting companies throughout India, the U.S., and the EU saw significant growth in 2012.
Likewise, PCG named independent consultants the fastest-growing group in the EU job market, noting a 45% increase in contract work from 2004 to 2013, concentrated primarily in the Netherlands, U.K., France, and Poland.
Oil & Gas
Analysts anticipate an enormous demand for oil and gas contractors in a number of major regions.
In a 2013 report, research firm GL Noble Denton said that the oil and gas industry was as booming as ever. However, it also noted that the industry was facing “increasingly challenging operating environments” and greater regulatory obstacles, creating a heightened demand for innovative specialists.
The report stated that, “For the first time in three consecutive years of this research, skills shortages now tops the list of key barriers for the year ahead.” This was a massive jump from the report’s 2011 respondents, who listed talent shortage as only their fifth most important barrier.
Oil and gas companies in the U.K. have cited staff shortages as a primary concern, creating an incredibly hospitable job climate for contractors. Although it noted a small drop in confidence from the previous quarter, a late 2013 survey by the AGCC(link is external) saw increasing confidence across the industry: 73% of contractors expected an increase in total employment in 2014.
Similarly, in a survey of more than 2200 oil and gas companies, U.K. contractors’ wages are expected to rise 15% over the next year due to a lack of qualified workers.
With an estimated increase of an average £64,000 to £73,600, 70% of companies fear that wages are rising too fast and blame the shortage on unexpected growth, a lack of apprenticeships, and the expatriation of local specialists.
Perhaps with an even more pronounced staff scarcity than in the U.K., the Middle East suffers from an aging oil and gas workforce; the average age of its technical workers is over fifty years old. Its lack of young talent replacements has created a serious demand for oil and gas specialists, according to a white paper by Deloitte.
Deloitte explained staff shortage and an aging workforce as problems experienced in oil and gas across the globe. However, it called this shortage “particularly pronounced” in the Middle East, partially because of international oil companies sending their best staff to more challenging regions like the Gulf of Mexico.
“In the past ﬁve years, however, things have started to change, as the Middle East re-emerges as a priority investment area for those [international oil companies] attracted by the size, availability, and stability of the resources available in the region.”
Director of contractortaxation.com, Duncan Macintosh, has reported positive market trends in Iraq and Iran. With one of the world’s biggest oil reserves in Iran and oil Consultancies booming in Iraq, Macintosh suggested strong opportunities in oil and gas that could also greatly benefit the region itself.
In another report by Deloitte, an oil company executive says that more oil and gas has been discovered in East Africa recently than almost anywhere else in the world.
Likewise, Duncan Macintosh suggested there were significant opportunities for various contracts in East Africa. “There is big investment about to start in Tanzania. There will be a full infrastructure overhaul: telecommunications, roads, schools and hospitals.”
Macintosh pointed to oil and gas opportunities elsewhere in Africa, noting a considerable number of Consultancies servicing large oil and gas companies throughout Angola, Libya, Mozambique and Gabon.
Last year, an REC Report on Jobs suggested that the demand for IT contractors had reached its highest in 2 years, increasing almost every month until 2013.
For international IT contractors looking for a more hospitable job climate, regional trends should be taken into account.
Computer World’s latest IT Monitor suggests that IT contracting has continued to see an increase in the UK, but that, in late 2013, temp positions didn’t experience the same growth as permanent positions.
Nonetheless, contract jobs still saw a 26.12% year-over-year increase, as well as a 1.6% increase in salary. Other surveys(link is external) suggest a rebounding market for IT contractors.
While the U.S. experienced a fall in permanent IT positions, companies still seem to be finding room in the budget for independent contractors, according to data(link is external) released by the Bureau of Labor Statistics.
Industry surveys(link is external) support this, with many companies reluctant to hire new full-time staff, but still needing the broad skillsets of experienced specialists.
The same report labelled Western Australia as the most confident state, with 33.9% of employers planning to increase their contracting headcount. WA was followed closely by Queensland with 26.3%.
Out of this data, IT was one of the industries expected to experience the highest growth in contracting positions.