New figures show that the proportion of contractors earning more than permanent employees is on the rise, Contractor Calculator reports.
According to the Recruitment and Employment Confederation’s (REC) February 2015 JobsOutlook report, the number of temporary workers earning more than their permanent equivalents rose from 19% in March 2014 to 36% in January this year.
In addition to this, more than half of contractors are now being paid the same amount of money as their permanent counterparts, which shows that contractor work is becoming a more appealing option for many workers.
As the REC’s chief executive Kevin Green explains, the need for talent in the labour market combined with increasing talent shortages, means that temporary work is becoming “more attractive.”
Furthermore, signs that the economy is beginning to improve is encouraging businesses to increase their productivity; but with little capacity to take on more work, hiring temporary workers is a useful alternative to increasing their permanent workforce.
In fact, contractors in high-demand sectors such as IT and engineering are now in a strong position to negotiate higher levels of pay.
The report found that contractors were being hired not because they were the cheaper option, but because their skills were needed. Three-quarters (75%) of businesses noted that their main reason for hiring contingent workers was ‘short-term access to key strategic skills’; compared to just 44% who said they hired them to ‘control costs’.
Dave Chaplin, CEO of ContractorCalculator, agreed that the findings disprove the views of critics who have often blamed rising contracting numbers on “cost cutting by client organisations who don’t want the expense of hiring an employee.”