Between March and April of this year the proportion of contractor clients with no spare capacity for extra work grew from a quarter to a third. This had led many to believe the contract market is set to expand as companies attempt to increase their ability to work.

The April Recruitment and Employment Confederation (REC) JobsOutlook, reported that half of all contractor clients are planning to bring in more contractors over the coming quarter. There is also some confidence about the future as 40% of them think this need will continue into the medium term.

REC CEO Kevin Green said: “The economic recovery is having a real impact on the jobs market, as these are the best results we have seen since this survey began in 2009.

“The labour market is becoming more candidate led and it is vital that businesses look at their hiring processes to ensure that they are fit for purpose and will attract the candidates they are looking to hire.”

This is great news for the contractor as they have more leverage as demand increases. This can translate into better conditions and higher pay. This is coupled with a skills shortage, with clients struggling to find workers with competent technical, engineering, computing, IT and telecoms skills.

While that’s good news for those who have those skills, Green is worried this will have negative consequences for the wider economy. He said: “Skills and talent shortages could jeopardise the recovery. Employers, recruiters and the government need to do more as this issue is intensifying every month and spreading to new sectors.”