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Pay growth for contractors and temps ‘accelerating’

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Pay rates for contractors and temps have risen at the quickest pace since September 2017, according to data supplied by recruitment agencies.

The monthly Report on Jobs suggests that the acceleration in pay growth was caused by the scarcity of contract/temporary candidates with the right skills and qualifications.

Tom Hadley, director of policy at the Recruitment & Employment Confederation (REC), which produces the report, said:

More people are entering employment, but it doesn’t make up for the shortfall of candidates for many roles, from cyber security and aerospace through to sewing machinists and drivers.

As a result, employers are increasing starting pay to draw candidates away from current roles into new positions. Growth in pay for temporary roles especially is accelerating.

Vacancies and demand on the up

The number of contract and temporary vacancies being advertised by recruitment agencies increased in both the public and private sector in March.

Within the private sector, all industry categories monitored in the report signalled stronger demand for contract/temporary staff, with hospitality leading the way.

Looking at regional variations across the UK, agencies based in Scotland saw the sharpest increase in billings (fees) from the placement of contractors and temps – suggesting the contract market is particularly strong north of the border.

Hiring intentions ‘at a record high’

The REC / IHS Markit research was published just a day after a separate report by BDO found that hiring intentions among UK businesses are at a record high.

The accountancy firm’s employment index rose to 112.09 in March, with this record-high reading being attributed to increased investment in people by UK businesses.

Peter Hemington, partner at BDO, said:

The performance of both the manufacturing and services sectors is encouraging for the health of the UK economy and the data suggest that there will be an improvement in GDP growth over the next few months.

How we help contractors and temps

At ADVANCE we have supported thousands of contractors and temps since 2010.

Whether you want to join a compliant umbrella company, set up your own limited company or subcontract as self-employed, we can help.

Call us on 01244 564 564 or request a callback to find out more.

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