The results were mixed; good news is that both permanent and temporary roles have increased in June but the rate of growth has slowed down. Demand for highly skilled contractors continued to increase with rates of pay also on the up.

Kevin Green, chief executive of the REC, said the figures pointed to a stable jobs market with appointment rates in sectors such as construction and engineering, still rapidly growing.

However, with predictions of hundreds of thousands of job losses in the public sector, it is too early to tell how much of a knock-on effect this will have on job creation in the private sector.

Contractors are flexible by nature so we hope it won’t negatively impact contractors too much and instead increase opportunities available to them.

The toolkit may also be useful for freelancers and contractors using an umbrella company. Umbrella company workers are thought to be captured by the regulations whereas those who are genuinely “in business on their own account” are not. This suggests contractors working outside IR35 will not be affected but many industry insiders however are yet to be fully convinced that this is indeed the case.

The REC are aware of the impact that the Agency Workers Directive will have hence why they are equipping recruiters with a toolkit which should help them overcome the administrative, legal and practical challenges once the legislation comes into force in October, 2011.

The REC will also be holding a webinar in July for contractors, recruiters and clients to view. They will also be holding a series of workshops specifically targeted to recruiters.

REC wants everyone in the contracting and freelancing marketplace to be prepared for the Agency Workers Directive (AWD).

18% of contractors expect investment banks and fund managers to provide the most job opportunities over the next year was compared to 15.7% in Q3 2009.

Accountancy contractors are aware though that demand for their services within the public sector is likely to decrease as are contractors with other specialist skills. This may not be the case though as alongside public sector cuts and permanent employee job losses, contractors might be hired as a short term measure to replace these permanent employees. It is certainly one to watch.

In other news, the Recruitment and Employment Confederation (REC) showed that billings for temporary IT workers fell last month to their lowest level this year. According to the REC’s index for May, demand for IT and Computing workers on a non-permanent basis stands at 56.4, down from 57.1 in the previous month, and 58.5 in March.

Independent Contractor Services (ICS) offer numerous accountancy and administration services to contractors with a whole host of specialist skills. Visit our website to use our contractor calculator and find out which service may be best for you.

Appointments increased at their fastest rate in 34 months, which offers further encouragement to many contractors. Kevin Green, chief executive of the REC, said the figures were “the clearest sign yet of a revival in the UK jobs market”.

“A rise in both temporary and contract work at the sharpest rate for nearly three years shows how they continue to provide vital flexibility for UK businesses as well as a valuable route back into work for job-seekers,” he added.

KPMG partner and head of business services Bernard Brown expressed optimism for an economic recovery.

“These figures show that private sector confidence is returning and that the UK is exiting recession at a pace,” he stated.

This report also backs up a comment by a senior analyst at IT consultancy Ovum. They recently said that more roles for IT professionals could emerge with outsourcing firms over the course of this year.

The REC has advised contractors affected by the umbrella company entering administration to contact the administrators, Carter Backer Winter.  It is now the responsibility of the administrators to pay any outstanding monies owed to contractors, however full settlements are unlikely.

Fiona Coombe, director of professional services at the REC, said: “Ultimately in the case of umbrella arrangements it is the choice of the worker as to who employs them. In cases of administration where the worker is employed by the umbrella company they would be able to claim unpaid wages from the administrator, who should write to them directly about this.”

The REC has also advised recruitment firms with contractors contracted through Albany to contact administrator Carter Backer Winter before processing any payments.

Independent Contractor Services have been providing solutions for UK contractors including Limited Company and Umbrella Services since 2002.

Limited company contractors are currently not within the scope of the regulations but the employment status of contractors is often challenged by HMRC. This means that clients will not necessarily be able to tell whether contractors are in or outside the AWD before they hire them.

In light of this, clients are asking recruiters to indemnify them against any claims which are brought by workers under the regulation meaning the recruiter would be liable if a claim was brought.  Concern has been raised by Association of Professional Staffing Companies that this will mean that clients will have little incentive to abide by the regulations set out in the AWD. Ann Swain, chief executive of the Association of Professional Staffing Companies (APSCo) added;

“End users will be able to push the cost of complying onto recruiters by getting recruiters to indemnify them in respect of any claims made in connection with the Regulations. This will leave ‘vulnerable’ workers no better off and heap further costs on recruiters. The Regulations will give temporary workers who are pregnant or new mothers more rights than equivalent permanent employees. This will impose significant costs on staffing companies.”

The Recruitment and Employment Confederation (REC) claimed a victory following an announcement on the final regulations for the Agency Workers Directive (AWD) and Kevin Green, REC Chief Executive commented;

“We welcome the delayed implementation date and the decision not to impose potentially damaging restrictions on the fees charged by agencies where a temporary worker is taken on permanently by an employer. However, there are real concerns that these EU regulations are ill-adapted to the UK labour market and could limit job opportunities at a time when flexible working options are providing a crucial route into employment.”

Guy Lamb, head of employment at DLA Piper has warned employers and clients that they should begin preparing for implementation of the agency workers directive. Employers that flout with the rules or who move staff around in very different roles every 11 weeks to avoid triggering their employees’ continuous service rights could face tribunal claims and fines.

Lamb explains: “Although the new rules don’t come into force until October 2011, employers will need to think about how they will budget for these new requirements now, and how they are going to place agency staff within their business in the future, to ensure they can still maintain a flexible workforce without breaking the rules. Obviously it is important that employees receive fair treatment within the workplace, whatever their employment status. However, the cost implications of these new rights could be quite significant for manufacturers in our region, in particular. Employers often rely on the flexibility offered by agency staff. They will be keeping a very close eye on their costs as we move out of recession and into recovery.”

As you can see by the comments from those with knowledge of the contractor marketplace, there is concern about how the AWD will affect contractors and also the recruitment sector and Independent Contractor Services will continue to research the topic and provide further updates when appropriate.

This report comes just as a survey from TalentPuzzle has shown that 76% of UK businesses believe they are not getting value for money from recruitment agencies. They feel frustrated that there didn’t seem to be any consistency in the rates charged by agents when they are recruiting for contractors and permanent employees.

According to TalentPuzzle, UK businesses currently spend £2.6 billion on external recruitment of contractors and permanent employees per year, but some are now looking for improved methods of recruiting and are seeking to reduce their fees. Virginia Raemy, CEO of TalentPuzzle commented;

“It is clear that both recruiters and employers need to improve the way that they work together. They should have a symbiotic relationship, rather than seemingly working against each other. By working much more smartly and effectively together this would help raise the quality and targeting of CVs. This is a win-win situation for both parties, as it helps employers to reduce their time to hire and helps recruiters improve their reputation, increase their quality and hopefully increase their new business,”

Bob Young, a partner at business rescue, recovery and restructuring specialist Begbies Traynor, said: “I have seen a significant increase in problems in the recruitment sector this year (2009). The main reason for this is the general downturn in the market.”

On a positive note though, the latest Jobs Outlook survey from the Recruitment and Employment Confederation (REC) revealed that 94% of employers are not looking to make any further cutbacks on jobs in 2010 and 20%are even looking to increase the number of contractor roles over the next 12 months.

They also commented that REC figures from the last three months show that the sector has been showing good signs of recovery. British employers are increasingly opting to end their freeze on recruitment, with a number of new jobs, including those in the construction sector set to be created as a result.

Speaking at the organisation’s first national convention, Kevin Green, REC chief executive, said:  “If you start looking at the data, there are some good signs for the last three months. We’re just starting to see growth in vacancies and placements in both temporary and permanent positions. I wouldn’t say there were huge volumes coming through but it is certainly slightly better.”

Earlier this month, figures released by the Office for National Statistics showed that the third quarter of this year saw the smallest quarterly increase in unemployment rates since the start of the recession and the largest quarter-on-quarter fall in the number of redundancies.