Contractor pay rates rise as private sector strengthens
According to the Recruitment and Employment Confederation (REC) and KPMG Report on Jobs, the rate of inflation of staff salaries increased to the highest for nine months during April, and was slightly above the survey’s long-run average, whilst pay for non-permanent employees rose at the fastest pace in a year. Demand for IT and computing contractors was highest, with contractor demand in engineering and construction coming second. Both sectors are also still showing rapid growth.
Commenting on the findings, the REC’s Chief Executive Kevin Green said that there was growth in the private sector whereas the public sector was slowing down, creating a ‘two speed’ jobs market. He also added that the Government Guidance on Agency Workers Regulations which was published last week “. . . should act to reassure employers of the ongoing effectiveness of temporary labour and the value of being able to flex their workforces to meet demand.” Bernard Brown, KPMG’s Partner and Head of Business Services, added that although the private sector is actively recruiting again, businesses that depend on public spending may be next in line for headcount reductions – but that this could be positive news for contractors, as private firms are more likely to hire short-term workers to manage their risk in public sector projects.