More contractors' earnings beat those for employees

Thursday 26 February 2015

Being an umbrella company contractor seems to be paying off for some, as the portion of temporary workers who are earning more than their counterparts in employment is rising.

According to the latest Jobs Outlook from the Recruitment and Employment Confederation (REC). The portion of temporary workers who are earning more than permanent employees within the same companies increased to 36 per cent in January 2015. That's up from the 19 per cent that was recorded during 2014.

What's more, 56 per cent said that temporary workers are earning the same within a company. Only two per cent said that temporary staff earn less.

REC surveyed a total of 600 employers for the Jobs Outlook survey, talking about what their hiring intentions are for the next quarter as well as the rest of the year. It gathered responses from across the public, private and non-profit sector from businesses of different sizes operating in a range of industries.

This edition of the Jobs Outlook included a comparison of agency pay rates to permanent salaries, for the first time. It shows that the portion of temporary workers who are earning more than permanent employees is going up.

The survey showed that the main reason why employers are increasingly turning to agency workers, according to 75 per cent of respondents, is that this lets them get access to key strategic skills for a short period of time.

Chief executive of REC Kevin Green said: "The option of taking on temporary work is becoming more attractive and this is indicative of a labour market where the need for talent is acute and skilled workers are in increasingly short supply. Ninety-three per cent of employers tell us that they have limited capacity to take on additional work, and many businesses are prepared to pay more for temporary workers in order to boost productivity and capitalise on the improving economic climate."

He said that this is a good sign for both jobseekers and recruiters who are in a good position when it comes to negotiating pay, particularly in those sectors where demand is high. That includes engineering, technology and driving. Indeed, skilled technical and engineering workers are in short supply when it comes to both permanent hiring and agency work.

Moving forward, Mr Green said that business leaders and politicians should focus on improving the talent pipeline so that people can gain the skills that are needed. The ways he suggested this should be made to happen include vocational training and opportunities for older workers to re-skill.

In terms of work capacity, this month's Jobs Outlook found that 35 per cent of businesses are operating without any capacity to take on more work, while a further 58 per cent only have a little bit of spare capacity.

Over the next three months, 77 per cent of employers are planning to take on more permanent staff, while 41 per cent are planning to hire more temporary workers during this time.

At the same time, the number of self employed people appears to be going up as new figures from the Office for National Statistics show that the number of people choosing this way of work has gone up by two per cent in the last year.

By Victoria McDonnell

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