Contractor rates spike amid skills shortages
New data from the Association of Professional Staffing Companies (APSCo)has revealed that UK businesses are paying more for contractors as skills shortages and economic uncertainty continue to drive demand for temporary support.
According to the data provided by Bullhorn, there was a 3% month-on-month increase in contractor roles in October. These figures were up 6% when compared to the same period in 2019.
The report went on to reveal that the amount invested in attracting these individuals has increased at a much higher rate than demand. In October 2022, staffing firms showed a 7% increase in contract revenue, compared to September. Annual comparisons showed a 14% increase in October.
The greatest increase was seen in pre-covid levels. Sales are up 48% since October 2019. With contractor costs inflated above the rates of demand, all indications are that the costs of employing contractors are increasing due to individuals being able to command higher rates in a tough skills climate.
Ann Swain, CEO of APSCo, commented: “The contract labour market has been heavily relied on as skills shortages remain rife. With talent in increasingly short supply since Brexit and Covid, temporary staff have been hugely valuable in filling gaps. However, what we’re also seeing is a further reliance on these individuals in an uncertain market where fewer businesses are confident in committing to permanent increases in headcount. The spike in contract sales revenue does show the level of fees contractors are able to command in such a skills short market. While we fully expect rates to increase in a cost-of-living crisis, the pre-Covid comparisons show a significant increase which is being driven by more than just the economic climate.”