REC/KPMG Report Suggests Demand for Umbrella Companies on the Rise

The latest jobs report released by REC/KMPG suggests that January saw the continuation of the growth of demand of highly skilled umbrella company employees along with other freelancers.

The report highlighted that despite the 15 year high seen in December of 2013 for both permanent and contracting/temporary staff billings measuring at a slightly slower rate last month, the rate of the growth recorded in this area of industry remained encouraging.

The report also noted that pay rates in these areas of industry are continuing to gather pace after the six year peak they climbed to in the final month of 2013. These figures suggest that demand for the use of the services of umbrella companies is on the rise throughout the country.

Going into specifics the report showed that demands for temporary/contract billings was strongest in the North and Midlands. January also saw the rate of demand for new staff surge in both the public and private sector.  However this growth was stronger in the private sector than in the public one.

Once the figures from the report were released, REC spokesman Tom Hadley weighed in on what they mean for the UK employment market. Hadley was quick to point out that despite rising living costs; these latest figures indicate good news for workers across the country. This is because a shortage of skills in specific sectors is driving up pay rates nationwide.

Hadley went on to comment that this outlines just “how critical the issue of skills shortages is becoming, as businesses will not be able to contribute to economic growth if they cannot find the skilled workers they need.” Bernard Brown, KPMG partner and head of business services added that many skilled workers are choosing to work on a temporary/contract basis due to wanting to try something out rather than picking up a permanent position right off the bat.

This has led to the popularity of Umbrella companies amongst freelancers and contract workers. An umbrella company exists to handle the considerable tasks of payroll, taxation and other financial issues for those working on a contract/freelance basis. The increase in the amount of workers opting for this method of working means that more people are choosing to outsource the considerable cost of these issues to umbrella companies.

As one of the nation’s top authorities on this issue, Paymatters has seen how the rising popularity of temporary/contract work has seen people turn to umbrella companies. As this trend continues it should further reshape the market.

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