Use of short term contracts restricts business growth

UK companies are stifling business growth by focusing on short-term staff instead of longer-term contracts or hiring permanent employees, a recruitment firm has claimed.

Over the past two years, the average length of an initial contract in the IT sector has dropped from six to three months, a trend which recruitment agency GCS described as a “high-risk strategy”.

Kevin Logan, head of business development at GCS Recruitment Services, said: “Although the economic outlook has been steadily improving, many companies are still reluctant to commit to staff by giving them lengthy contracts or permanent positions.

“We believe this is a false economy because as soon as staff join on short contracts they start looking around for their next job and the employer risks being left without essential IT skills,” he added.

According to Logan, short-term contracts “do not count in the loyalty stakes” and this may even mean a contractor going directly to a competitor unless he or she is offered lengthier placement terms.

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