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Lack of available permies could be the reason behind increased contractor rates and billings

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The most recent REC/KPMG Report on Jobs has revealed that contractor billings have risen at the strongest rate in over 15 years.

The Recruitment and Employment Confederation and KPMG’s latest survey found that agencies’ billings from the employment of temporary/contract staff increased strongly in August, with the rate of expansion picking up to the fastest since July 1998.

According to the findings, the availability of staff to fill permanent job vacancies continued to decline in August, extending the current sequence to four months, and perhaps being the reason behind businesses becoming so reliant on highly skilled contractors.

The Report on Jobs also found that temp pay rates continued to rise; and among the various contracting areas, the sharpest rise in demand was the engineering sector.

REC chief executive Kevin Green commented on the latest findings, “August was an extraordinary month for the UK jobs market, with temp placements growth hitting a 15 year high. Our temporary worker index is the highest we have seen since 1998, the same summer Google was founded and France won the World Cup for the first time. There is more good news for all workers with pay rates for temps rising for the seventh consecutive month and starting salaries for permanent staff increasing at the highest rate in five and a half years.

“Vacancy growth has hit a six year high and fluidity is returning to the jobs market, so over the coming months we expect to see a noticeable improvement in official employment figures. The major issue now is the worrying lack of candidates to fill the jobs being advertised. In August, the number of vacancies increased at the sharpest rate in over six years but the availability of staff keeps declining.

“This month’s figures should be celebrated and efforts should be focused on addressing the skills gap rather than picking holes in flexible working.”

What’s life really like as a contractor? Visit our Life as a Contractor case studies hub for real life stories on working through your own Limited company, taking money out of your Limited company, understanding IR35 and much more.

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