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EU vote causes UK employers to favor temporary staff over permanent

According to a recent report carried out by the Recruitment and Employment Confederation, companies across the UK are delaying investment plans in new full-time employees as the uncertainty over Brexit continues. Instead, many companies are placing a preference on temporary staff to avoid recruitment issues before article 50 is submitted and negotiations are complete.

Over the course of the last month the spend on temporary workers rose at the fastest pace in more than a year, with nerves surrounding the referendum discouraging companies from progressing with permanent employees. Whilst this was set to change if the UK voted to remain in the EU, the success of the leave campaign has caused many workers to carry on along this path.

This increase in temp staff across the UK is being spotted by recruitment consultants across the country as employers turn to temps and contractors rather than having to rely on making unnecessary changes. It’s also a way of way of companies hedging any possible change to the UK’s relationship with Europe in the impending fallout from formally leaving the EU.

This issue has been heightened by the big rise in the minimum wage, with organisations having to pay increased staff costs due to the growing concern since leaving. Pay rates for temporary workers increased at the strongest rate since July 2007 last month, which recruitment agencies linked to the introduction of a new minimum wage for those aged 25 and over. In comparison, pay growth for permanent staff eased to a three-month low because major companies dared not risk taking on any more full-time members.

Quite what will happen with regards to temporary and permanent staff after Brexit is still very much up in the air. However, one thing that is certain is that for many companies the impending exit negotiations can’t come soon enough, so that longer term plans can be made and stuck to.

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