Why is there such a difference in permanent v’s agency pay?

A third of employers (36 per cent) say that temporary workers earn more than they would on a permanent contract at their company, and fifty-six per cent say temporary workers earn the same. Only two per cent say that temp workers earn less, according to the latest JobsOutlook survey by the Recruitment and Employment Confederation (REC).

This month’s report includes for the first time a comparison of agency pay rates to permanent salaries. The data shows an upward trend, with the proportion of employers stating that temporary staff earn more than their permanent colleagues increasing from 19 per cent in March 2014 to 36 per cent in January 2015.

Three quarters of employers (75 per cent) said that the primary reason for taking on agency workers is to gain ‘short-term access to key strategic skills’.

REC chief executive Kevin Green said:    

“The option of taking on temporary work is becoming more attractive and this is indicative of a labour market where the need for talent is acute and skilled workers are in increasingly short supply. Ninety-three per cent of employers tell us that they have limited capacity to take on additional work, and many businesses are prepared to pay more for temporary workers in order to boost productivity and capitalise on the improving economic climate.

“This is great news for jobseekers and for recruiters who are in a strong position to negotiate pay, especially in areas where demand is particularly high such as engineering, technology, and driving.

“For business leaders and politicians, the focus needs to be on improving the talent pipeline so that more people develop the kind of skills that are needed. That means better careers advice in schools, vocational training, and opportunities for older workers to reskill.”   

This month’s JobsOutlook survey found that 35 per cent of businesses are operating with ‘no capacity’ to take on more work, and that 58 per cent have only ‘a little’ spare capacity. Almost eight in ten employers are planning to hire permanent staff in the next three months (77 per cent), and two in five (41 per cent) plan to hire more agency workers in the same timeframe.
Credit: rec.uk.com