Data unearthed by the Association of Professional Staffing Companies (APSCo) has found that while permanent placements for workers have grown significantly in the last year, threats like that of IR35 are driving down places for contractors.

APSCo’s member recruiters reported a 10 per cent growth in permanent placements in February when compared to last year, though demand for contractors fell across most core sector groups.

Though some of these drops were relatively modest, contractor use has declined by 17 per cent on a year-by-year basis.

APSCo itself attributes this to a huge fall – 38 per cent – in IT contracting after April’s public sector IR35 reforms which would have affected a number of government contractors.

Only the finance sector took on more contract roles in the past year (climbing 11 per cent).

APSCo CEO Ann Swain said that two key factors appeared to lie behind the strong performance of the professional jobs market with respect to permanent placements: hirers are competing keenly for rare skills and they are clearly uncertain about the future of more flexible options.

She added:“While changes to IR35 legislation in the public sector have clearly taken a chunk out of the contract market, a proposed consultation on extending reforms into the private sector means that employers are increasingly weighing up if the perceived complexity associated with managing a contingent workforce is worth it.”