When the UK Office IQNdex was introduced a year ago, temporary labour hourly rates could fairly be described as volatile. Rates had soared almost 8 per cent over the prior year, driven by a VAT increase, higher National Insurance premiums and inflation approaching 5 per cent. Agencies were also likely hedging against the uncertainty caused by the Agency Worker Regulations (AWR), which had just come into effect. The economy was growing feebly but it had little momentum. Against this background, it was hard for employers and agencies alike to confidently plan for labour requirements and costs.

A lot has happened in a year. In the twelve months since the initial release of the UK Office IQNdex, the UK economy dipped again into recession, and then grew encouragingly in Q3 2012. Inflation has cooled and there have been no new extraordinary external impacts on hourly rates. While an administrative burden, the AWR has not proven to be the nightmare many predicted and feared. Overall hourly temp labour rates for the professional, technical and administrative sector tracked by the Office IQNdex declined over 3 per cent in early 2012. Since then, hourly labour rates have varied little over the past 6 months.

 With only one quarter of renewed economic growth for encouragement, business is understandably reluctant to take on long term commitments. This hesitancy is evident by how firms have chosen to meet their staffing needs in the most recent reported quarter. New hires were evenly distributed among part-time, temporary, and permanent positions. Clearly the AWR has not banished agency temps from consideration. It is also fair to think that a year of slightly lower and more predictable hourly rates has made this option more attractive. In light of uncertain business prospects, companies have embraced a diversified hiring strategy that meets immediate labour requirements while preserving maximum flexibility.

Increased reliance on part-time and agency temp labour during the economic recovery is not unique to the UK. IQNavigator has reported on the same phenomenon in the US, where temp hiring has been in the vanguard on new job creation. This similar pattern between the two nations in part must be attributable to the shared experience of global economic uncertainty. However, it also begs the question of whether one of the long term consequences of the recent recession will be a shift toward a more diversified and nuanced blend of working arrangements.


About the UK Office IQNdex: IQNavigator’s SaaS (Software as a Service) application is used by leading global companies to manage their temporary workforces in nearly 50 countries. This flow of thousands of assignments gives IQNavigator direct and timely insight into actual market rates. IQNavigator clients were introduced to this unique view of the US temporary labour market in April 2011. The same capability is now available to executives responsible for operations in the United Kingdom, providing insight into current market direction.

 The focus of the new UK index is on the direction of hourly rates being paid by large enterprises to staffing agencies for administrative, professional and technical temporary staff in the United Kingdom. Called the UK Office IQNdex, this measure of labour cost trends is based on assignments including clerical, finance and IT roles. Industrial jobs and specialised fields such as healthcare are excluded. All assignments reflect labour performed within the UK. Presenting labour rates in an indexed format facilitates the comparison of trends across different markets and currencies. The baseline month of the UK Office IQNdex is January 2010.

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