Clients putting pressure on contract rates

Published on Apr 8, 2009 | | Contract Rate Checker

A top 20 recruitment agency has reported that although contractor numbers remain healthy, clients are exerting pressure on contract rates due to the poor economic environment.

Matchtech Group PLC, who are well known for their engineering expertise as well as IT and other industries, released its half yearly results up until the end of January 2009.

The Group reported healthy figures with revenue up 18%, and increases in net fee income and operating profits.

The number of contractors on Matchtech's books remained steady compared to six months previously - 4528 compared to 4541, and contract net fee income actually rose by 12% during the reporting period.

However, the economic environment appears to have changed significantly in the last few months, with permanent fees in February and March 2009 down by 26% on the previous year.

Although the number of contractors has changed little since the reporting period until 31st March 2009, the agency reports that clients are "placing pressure on contractor pay rates and our margins".

Although the company feels it is protection to an extent in the current climate;

"The Group has maintained a healthy balance between contract and permanent placements coupled with a highly diversified client and sector base providing a degree of protection against market volatility."

It also acknowledges the clear impact the 'credit crunch' is having on the recruitment industry:

"... the economic climate is increasingly challenging, as evidenced by the significant reduction in growth in Quarter 2, and the Group has much reduced visibility for the remainder of this financial year."

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