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UK – Pay rates for temporary staffing drops despite AWR

22 June 2012

New research suggest that temporary labour charge rates in the first half of 2012 for white-collar workers are falling despite the introduction of the Agency Worker Regulations (AWR) which was enforced in December last year and was expected to push up rates.

This is according to IQNavigator’s 2012 UK Office IQNdex which shows “strong evidence of wider economic conditions in the UK, where the first half of 2012 saw rates for temporary workers flat or slightly declining; not surprising given the state of the UK economy,” said Peter Smith, editor and co-managing director of SpendMatters UK/Europe.

He also said that it was “surprising” the AWR appears to have little impact on the rates or use of temporary labour. “It looks likely that even when governments introduce more regulations, buyers are still recognising the benefits of flexible resources,” Mr Smith said. 

Last year the index actually showed a surge in hourly rates of more than 10% for private sector workers in clerical, IT and professional roles. This, the research suggests, was partly driven by VAT increases and changes to National Insurance.

But now the trend has been reversed in the second half of 2012 with hourly pay rates falling, which could be due to a number of factors: weaker business expansion reducing demand for temporary labour, the use of temporary staffing declining due to seasonal variations and finally less spending on highly paid technical and strategy consultants.

The IQNdex monitors the total hourly charge rate paid by contingent buyers, including the wage rate, statutory costs paid by the agency and the agency markup. IQNavigator is a provider of procurement solutions and to download the latest version of the index, click here.

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