With the temporary recruitment industry contributing around £46bn to the UK economy and serving as a crucial portion, the UK government has made some positive changes in April 2023 for workers’ benefits by increasing the minimum wage.
It is indeed jolly news for individuals seeking temporary work at an impressive wage rate. However, this surge has substantially impacted the UK’s temporary recruitment industry, which pays reasonable wages to temporary workers.
You must wonder how this minimum wage increase will impact temporary recruitment agencies. This blog will answer your questions by sharing the potential effects of this surge on the UK’s temporary employment.
What is the existing minimum wage rate in the UK?
Let us first walk you through the current minimum wage rate in the UK for workers. According to the Gov.UK website, in 2023, the minimum wage rate for
an apprentice is £5.28, for 18-20 is £7.49, for 21-22 is £10.18, and £10.42 for 23 and above.
These hourly minimum wage rate hours will increase in 2024 to £6.40 for apprentices, £8.60 for 18-20, and £11.44 for 21 and above.
The UK Government has planned to increase the minimum wage rate to enhance the workers’ living standards and overall quality of life. The aim is to help individuals manage their cost of living.
Impact of Minimum Wage Surge on Temporary Recruitment Industry
With the number of temporary workers in the UK increasing to nearly 12%, the temporary recruitment agencies see it as a golden opportunity to earn significant revenues.
Temporary workers are paid less than permanent position employees, and with this surge, they will be relying heavily on temporary agencies. The £46bn size industry will get more individuals contacting them for job vacancies.
Hence, agencies should work on strategies for streamlining their processes and adopt approaches to handle a vast number of bookings.
It is recommended to implement advanced technology cloud-based Recruitment CRM Softwarewith impressive features to automate human involvement tasks and speed up the processes.
For instance, it provides a self-serve option for candidates to upload their resumes and documents and submit their fundamental details. The agency’s consultants have to review them. It will save considerable time, which can be allotted to principal activities.
Minimum Wage Surge Advantages for Temporary Recruitment Agencies
This section will walk you through the tremendous advantages of the minimum wage surge for temp recruitment agencies.
Rise in Demand
As mentioned above, the minimum wage increase is a boon for temp agencies in the UK. They will be contacted by workers seeking temporary employment and also by businesses to hire temporary workers as they don’t have to pay higher wage rates like permanent position employees.
It is going to increase demand for temporary recruitment agencies in the UK. If you are engaged in temporary staffing, you must consider incorporating temporary
recruitment software to speed up your processes, such as booking, invoice, timesheet, payroll, compliance, and more.
Your clients can manage timesheets online in real-time from their end, and invoices are generated online. It eliminates human involvement in their management and keeping Excel sheets.
You can straightforwardly share with clients through the software. Candidates can upload and update their compliance documents from their end and get timely reminders regarding documents’ expiration dates. It saves a great deal of time and increases overall productivity.
Higher Revenues
With the minimum wage rate surge, more candidates will contact temporary agencies for employment. It will cash in incredible revenues from candidates to get them recruited at a handsome wage rate.
Also, businesses will show keen interest in temporary workers over permanent employees to save wages paid to workers.
They will be willing to pay more fees to recruitment agencies to supply them with qualified temporary workers and manage their hiring needs. It is a lucrative opportunity for temp agencies to elevate their overall revenues.
Increased Retention Rate
With the minimum wage rate surge, temporary workers will be paid more than usual; they will feel motivated while working, leading to exceptional job satisfaction.
It will eventually reduce the turnover rates, and candidates will stay connected with the agencies to get them better temporary work opportunities.
Temp Agencies will build long-term relationships with candidates and will be bolstered with a loyal pool who will be available for upfront work.
Solid Credibility in Local Market
Minimum Wage Rate hike will represent challenges to businesses having to pay higher rates. However, the silver lining is that with increased wages, temporary workers will be more motivated by money and therefore, more reliable, turning up to work on time. This represents a new opportunity for temp agencies looking to solidify their presence in the local market. Serving clients with a reliable and quality service will foster a solid reputation and lead to word-of-mouth recommendations for your agency.
Conclusion
After reading the blog, you will have fully comprehended the impact of the minimum wage rate surge on temporary recruitment agencies. You will be familiar with the existing and new wage rates.
Also, you will have understood the advantages of temp agencies. This surge in wage rate will benefit all three parties – temporary workers, temporary agencies, and businesses.
Also, temporary recruitment agencies can streamline tasks and simplify processes for candidates and clients by implementing temporary recruitment CRM software in their strategy.
Automated generated online invoices, online timesheet management, and payroll processing will eliminate manual management in Excel sheets and ensure transparency in communication for nurturing long-term relationships.
They are all pivotal and handy features to ensure you can automate most of your tasks and accomplish significant productivity.