Outsourcing company Capita is renegotiating contractor rates in response to labour market woes, but intends to maintain its recruiters’ margins.

In a move to ensure service levels are kept high and to protect the stability of recruiters it deals with, Capita has decided to concentrate on day rates paid to contractors and temporary staff, eliminating fee pressures.

Dawn Marriott-Sims, head of resourcing, Capita Group, told a recent Association of Professional Staffing Companies (APSCo) conference on flexible working: “We haven’t renegotiated margins, but we have looked at day rates and what we have been paying people.

“We have compared the rates we are paying to what we would be if we went to market now and adjusted them accordingly,” she said, adding that the company has reduced pay in a number of instances.

Marriott-Sims explained that putting pressure on fees would risk service levels and threaten to destablise its recruitment agency partners, affecting their profitability.

Monica Rodrigues, senior consultant financial markets at Start Resourcing, told Recruiter contrary to Capita’s approach, many clients had been putting pressure on fees. “It was interesting that she would mention that, in most cases, companies are looking to cut down costs due to the current economic climate,” adding small agencies were at risk if fees dropped too low.

Capita currently employs 1,500 contractors and 1,000 temporary workers, managed by a 45-strong resourcing team.

Marriott-Sims said the group would not look to cut down its 50-strong preferred supplier list, but that it constantly monitors the number of the “specialist and niche” suppliers it uses to ensure value.