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The Spanish Government could save millions in unemployment benefits and cut down the unemployment rate “substantially” if it adopted “more favourable” legislation towards temporary employment agencies.
This is according to the Spanish association of temporary staffing agencies (Fedett) which said that the state could save a total of €1.5 billion if staffing firms had a greater presence in the labour market.
This echoes earlier findings by the Spanish federation of employment agencies (AGETT), which urged the government to support the growth of staffing companies as this would lead to increased tax savings and a reduction in jobseeker allowances.
Fedett argues that staffing companies have a lower presence in the jobs market when compared to other European markets.
Currently, it says, staffing firms only manage 0.5% of the entire Spanish labour market. If this number was increased to 1.0%, unemployment would fall by one percentage point and the government could therefore make saving in income tax and social contributions.
“Fedett data suggests that 30% of people who have worked for a staffing firm are in stable employment afterwards,” the organisation said. It argues that this percentage would rise if labour reforms in Spain would allow for a greater presence of staffing firms, following recent calls from the organisation for a new labour market reform.