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Higher pay rates on offer for contractors

Personal service company contractors may be in a good position to request higher pay rates over the coming months, according to a new report.

The Recruitment and Employment Confederation, which is more commonly known as REC, has found that businesses are increasingly upping the amount they are willing to pay workers as the hiring struggles associated with the ongoing skills shortage continue.

A survey carried out by the organisation led to the discovery that 19 per cent of companies are planning to take on more contractors and freelancers in the medium term, with 42 per cent increasing the pay rates they are offering to workers in a bid to attract the best talent possible.

This is good news for limited company contractors, as they may find themselves earning more if they can demonstrate a high skillset to recruiters who desperately need more workers.

Overall, 34 per cent of businesses said they would need to take on more contractors if demand for their product or service increased, due to having no spare capacity at present.

While it's great for contractors that they may be able to earn more money due to the skills shortage, it is clear that organisations are struggling to find the talent they need.

Kevin Green, Chief Executive of the REC, commented: "If you're ready and willing to move jobs, you could benefit from an increase in pay, as many employers are increasing starting salaries to attract candidates with the qualities that they're looking for.

"However, throwing money at the problem isn't a long-term solution. We need to train people up by embedding employability in schools, providing effective careers guidance and promoting apprenticeships."

The survey also found that 80 per cent of recruiters have been forced to advertise a vacancy more than once in recent months due to no candidates with adequate skills applying for it, while almost one-quarter (24 per cent) have felt forced to lower the requirements of a role in order to be in with a chance of attracting talent.

This therefore suggests that contractors need to be taking action to upskill themselves to make sure they can continue to add value to the clients they work for, this being particularly important for those operating in the engineering, technical and hospitality sectors, which are affected by the biggest skills shortages.

Almost half (49 per cent) of businesses also revealed that they anticipate challenges in hiring permanent workers over the next three months, meaning contractors could do their bit to help this situation by putting themselves forward for these vacancies, demonstrating to companies that they can add long-term value to their operations from a short-term contract.

Image: ajcabeza via iStock

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