Umbrella Companies may Weather the Storm but Prospects are Grim for Permanent Appointments in 2012

Contractors making a living through umbrella companies may draw a little comfort from an otherwise pessimistic new report from Manpower. Recruitment expectations have plunged to their lowest level since 2009 and the UK jobs market is now poised precariously “on a knife edge,” the report concludes, after surveying next quarter’s hiring intentions amongst 2,100 employers.

This may mean that firms will seek out the services of PAYE umbrella contractors and other freelancers in order to keep permanent headcounts down whilst fulfilling essential business projects. The implications for recovery do not look good in the foreseeable future. At the beginning of 2011, for example, finance and business services were the most optimistic sector; as the year draws to a close, they have become one of the most pessimistic.

The Manpower survey suggests that 80% of employers plan no increase in staffing levels for the first quarter of 2012. Those remaining cancel one another out so far as hiring is concerned – employers planning to appoint new staff equal those planning to cut personnel. Intriguingly, the oft-cited north-south divide appears to have been replaced by an east-west version, with employers in eastern England most optimistic about hiring next year while those in western England, Wales and Northern Ireland expressing deep gloom.

Manpower Managing Director Mark Cahill said “We see a number of business sectors battening down the hatches, holding on to existing levels of staff and not hiring with any great enthusiasm. Employers have now adopted a wait-and-see approach to hiring; they are cautious about the economy and the fear of a euro-wide contagion is weighing heavily on their minds.”

Source;

http://www.ft.com/cms/s/0/b97a8bae-24d0-11e1-bfb3-00144feabdc0.html#axzz1gV4ciMGP