Soaring demand for contractors in June leads to boost in rates of pay
June saw an ‘unprecedented’ surge in contractor hiring, with rates of pay also on the rise
The past 18 months have been difficult for many freelancers and contractors, who saw projects placed on pause and demand for their services take a massive hit as businesses closed their doors.
But things look like they’re changing in a big way. The demand for temporary workers - including freelancers and contractors - is increasing at a rapid rate. In June, contractor hiring experienced its biggest upturn in nearly 23 years, as businesses started equipping themselves with the skills and flexibility they needed for the full reopening of the economy.
This is according to the latest UK Report on Jobs, compiled by KPMG and staffing association, REC. And as a result of this surge in activity, due to what was described as an “unprecedented increase in demand for workers” across the board, rates of pay for temporary workers also rose sharply, at their quickest pace since October 2004.
Contractors benefit from returning business confidence
Such a marked rise in the need for temporary and permanent staff (whose demand also grew at a historic rate) is a clear indication that business confidence has returned, said Claire Warnes, Partner and Head of Education, Skills and Productivity at KPMG UK.
“June’s data confirms that momentum in the jobs market continues to surge, with improved business confidence leading to record high recruitment activity.”
Need for temporary workers sees rates of pay accelerate
Granted, this has created challenges for hiring organisations, many of whom are struggling to land the talent they need to cope with the easing of lockdown. Just as an example, the data shows for the fourth monthing running there was a drop in the availability of candidates - a trend that Warnes said was the “most severe deterioration” for 24 years.
But this war for talent, as it's often referred to, stands to benefit freelancers and contractors, who find themselves in a position to command higher rates as businesses compete for their services. As touched upon briefly, this increasingly competitive market saw the average fee charged by temps in June rise by its biggest margin for 16 years.
Growth recorded in all monitored regions, across all industries
It was also good to see growth in contractor hiring activity recorded across all four monitored regions in England, with the Midlands leading the way. The slowest, interestingly, was noted in the Capital, where it tends to be the strongest.
Similarly, demand for temps grew in all monitored sectors. Blue collar workers, such as those working in the trades, were said to be those most in demand in June. But as REC’s CEO, Neil Carberry explained, other “key shortage” industries - like hospitality, food, driving and IT - are likely to remain critical in ensuring momentum going forward.
He also said the “jobs market is improving at the fastest pace we have ever seen, but was quick to urge caution, adding, “it is still an unpredictable time.”
What does this mean for contractors?
KPMG and REC’s findings suggest more opportunity for contractors and the potential to secure projects that offer higher rates of pay. Taking everything into account - from the pandemic to recently enforced IR35 reform - that businesses are relying on contractors as catalysts for their recovery and growth is wholly positive news after a particularly challenging period.