Permanent jobs are in decline, partly because of the Living Wage - but that's not a bad thing for job seekers

We're in a transition period where people aren't taking up badly paid roles so they're gravitating towards temp work. And it's a good thing that employers are being punished this way

The Living Wage is currently £9.15 an hour in London and £7.85 in the rest of the UK (Corbis)

According to figures released by the Recruitment and Employment Confederation, since the introduction of the National Living Wage recruitment for permanent jobs has slowed down. Meanwhile, temporary and contract positions have increased, with recruitment agents seeing their contract billings increase since April. Does this mean the National Living Wage is bad for employment?

There could be a multitude of reasons behind this – not just the introduction of the Living Wage – but recruitment on the permanent front has been slowing down for quite some time, and this isn’t necessarily a bad thing for job seekers. Stay with me.

If you’re someone who’s only ever been in the jobs market during the recession era, or you were finishing off your education during the recession, it can be difficult to accept that a change like this could actually work in your favour. The default position is that any scary-sounding change in the market will cause you to become jobless, homeless and desolate within weeks – but this is no longer the case.

First off, now we’re out of recession and onto more stable economic ground, there are more jobs than people to fill them. During the recession era, there were a lot of candidates scrambling for every position advertised, whereas now it is the total opposite – many jobs go unfilled. With this excess of jobs, people can afford to be choosier about where they work.

Because of this, job seekers are more likely to demand more money for their services now – and because quite a few sectors are facing a lack of skilled workers, people are changing companies more often and increasing their salaries as they go. The power is truly with the people in this respect, but some companies are not comfortable with coming to terms with this shift of power. It’s now commonplace for positions to be left unfilled as candidates refuse to accept measly salaries for the sake of job security.

And here comes the allure of contracting. People working on temporary contracts can make a lot more money on day rates, and if companies are unwilling to pay more on the permanent front, they have no choice but to bring in contract staff to fill the gaps (as we see often in the NHS). The fact that the NHS has to carry out recruitment drives abroad to tempt staff over to the UK to fill permanent positions says it all.

The rise of the contractor and downfall of the permanent candidate does have something to do with the National Living Wage – it is about awareness, and we have been made aware through this legislation that we deserve to be able to live normal, acceptable lifestyles with our salaries.

No jobs advertised at X company for the past 3 months? It may look as though they’re on a hiring freeze, but I would bet money that said company has hired multiple contract or agency staff over that time. Line managers are able to sign contractor day rates off through a number of streams – project budget and department budget – I knew one Creative Director who had been signing off his contract creative staff as stationery for years!

So the truth is they’re actually hiring all the time – it just doesn’t look like they are.

Temp workers on contracts often see the same benefits as a permanent member of staff – discretionary sick pay, holiday pay, and increased take home pay due to the tax arrangements utilised by umbrella and LTD companies (all above board, of course).

In reality, then, the National Living Wage has empowered the workforce to make more economically beneficial decisions for employees, as opposed to employers, for once. It is something for companies to ponder: if they want staff that can do the job, they need to respond to this increase in hourly pay by increasing permanent salaries across the board, and coming out of this arrogant viewpoint that people should work on their terms, as opposed to their own.

This is an arrogance that needs to be quashed in the private sector particularly – I’ve seen many an employer confused when his or her star candidate rejects an offer of employment due to the fact that they are offering way below the current market rate, and they cannot fathom it. “But I’m offering them a good job! They’re so ungrateful - they’ve wasted my time!” they lament - it is a total turning of the tables that many are refusing to accept as the new norm. This is what national financial recovery looks like.

The employment market is in the hands of the employees now, and it’s time that we took the opportunity to exploit this fully. As someone who recently lived in London on £20,000 per annum, I know it’s normal for many to have to choose between food and transport for a section of the month.

The new normal – where we, the workers, are able to dictate the terms, is coming. So don’t let anyone tell you the National Living Wage is destroying the jobs market.