Latest analysis of the UK jobs market by KPMG and REC shows that temporary worker billings have increased significantly in recent months.

The UK Report on Jobs for January shows that hiring activity increased again at the start of 2022.

It also revealed a shortage of available candidates for temporary and permanent roles that’s putting upwards pressure on starting salaries and temporary worker pay packets.

Researchers believe that the easing of pandemic restrictions and improved market confidence is driving demand for workers in the new year. This has led to a sharp increase in temporary worker billings, which have expanded at the quickest rate since last August.

Claire Warnes, Head of Education, Skills and Productivity at KPMG UK, said: “The new year has seen the jobs market continuing where it left off, with a steep climb in permanent and temporary hiring.

“It will be important to monitor how these dynamic features of the job market respond to the competing pressures being felt by both businesses and candidates – the desire to make the most of the reduction in Covid restrictions on the one hand; and the understandable concern over the cost of living and inflationary rises on the other.

“Some sectors are continuing to show the strain of high demand for permanent and temporary roles. In particular, the IT and Computing, and Nursing, Healthcare and Medical sectors saw the greatest vacancy increases for yet another month, reflecting the significant workforce and skills challenges which these sectors have faced, and which the pandemic has accelerated.”

Miles Grady, Director of Umbrella.co.uk, said: “Temporary workers are incredibly valuable at times like these. The economy is rebounding quickly, but there aren’t enough permanent candidates available to fill positions. In these circumstances, contractors can fill important labour gaps and they can usually charge a premium for their services.

“Recent changes to legislation affecting contractors - like the expansion of punitive IR35 rules - have reduced the number of contractors available to take on work. It’s not clear to what extent these changes have hampered the recent economic recovery, but it will almost certainly have had an effect.”

Contractors and other temporary workers can avoid IR35 legislation by working through an umbrella company. For more information about contracting in 2022, speak to a member of the team today. Call: 0800 121 6513.