Highest rise in pay rate of contractor pay for seven years

Wednesday 8 October 2014

Payment rates for umbrella company contractors have risen at the fastest pace seen for the past seven years.

That's according to the latest Report on Jobs from the Recruitment and Employment Confederation (REC) and KPMG.

This survey showed that hourly pay rates for temporary staff rose in September at the fastest rate seen since November 2007. The rise in hourly rates was broad based across the country.

Similarly, the rise in permanent starting salaries accelerated in London, having eased to a seven month low during the last survey. Even so, the capital saw the slowest overall rise in permanent starting salaries compared to the rest of the country.

As well as a rise in pay, billings for temporary and contract staff rose at a faster pace during September, marking the 17th consecutive month when this has happened.

This is in spite of the fact that the rate of expansion of work placements for permanent staff slowed during September. Although there was an increase, the rate of growth eased to a ten month low.

Demand for particular contractors may be on the rise too as the survey also showed a decline in the number of permanent and temporary staff available.

Rates at which permanent staff placements grew during September were fairly broad based across the four regions in England that are monitored by REC and KPMG: the north, the midlands, the south and London.

It found that the north saw the strongest increase of permanent staff placements while London saw the slowest.

The midlands saw the fastest growth of temporary staff placements during September while the south saw the weakest expansion.

Having seen the biggest deterioration in available candidates as well as the strongest rise in demand for staff, it was the midlands that saw the highest pressure to raise staff pay.

It was the private sector that saw the fastest rise in demand for staff during September compared to the public sector. The quickest growth rate in vacancies for temporary placements was in the private sector, while short-term roles in the public sector saw the slowest rate.

The sector that saw the highest rise in demand for short-term staff was nursing, medical and care, which was closely followed by engineering. Meanwhile, executive and professional roles saw the lowest demand for temporary workers.

Where permanent vacancies were concerned, the engineering sector saw the highest demand for staff, which was also the case at this time during last year. The sector that saw the slowest rise in demand was in hotel and catering work.

Speaking about the results, chief executive officer of REC Kevin Green said: “Once again more people have secured permanent and temporary jobs via recruiters than in the previous month, a sign of the continued strength of the UK’s labour market.

"Hourly pay for people on temporary contracts in London has risen at the fastest pace for seven years, which shows that employers are bringing in temps and contractors with the skills they need quickly and are willing to pay to do so.

"The increasing lack of candidates continues to be a worry as shortages spread across more industries."

By Victoria McDonnell

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