Contractors working for umbrella companies could become the beneficiaries of the austerity measures currently hitting the public sector, according to a prominent recruitment expert. Steve Huxham, who is Chairman of the Recruitment Society, believes that public sector Human Resources Departments are finding it increasingly difficult to administer the rising number of job hunters and are beginning to outsource to external recruiters as a result.

Mr Huxham added that no employing organisation should become “overwhelmed” by increasing volumes of jobseekers as practical solutions were readily available. If companies or public sector departments begin to feel overstretched by the rising number of applicants, the problem “can be easily prepared for.” He went on to urge public sector HR Departments to outsource if they were beginning to fail with recruitment, as the necessary roles could be successfully undertaken by PAYE umbrella contractors.

His comments coincide with the latest REC/KPMG Index on jobs, which contained further promising news for umbrella companies; contract staff billings reached a seventh high during January and permanent posts reached a six month peak, indicating that business confidence may once again be on the rise. The study, which surveyed 400 companies, reveals that the temporary placements index, which includes contractor posts, rose from 52.8 points in December to 56.5 in January. KPMG’s Partner and Head of Business Services, Bernard brown, advised a degree of caution, however, saying that whilst the figures were encouraging, the effects of public sector job josses, the January VAT rise and slowing economic growth could lead to a “volatile” jobs market in the coming months.

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