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UK – AWR reduces opportunities for agency staff

23 July 2012

The Agency Workers’ Regulations (AWR) have had a deep impact on the staffing industry since its implementation last year, and new research indicates that businesses have cut down on the number of temporary staff while some have stopped using them altogether.

A new survey by the Confederation of British Industry (CBI) and recruitment specialists Harvey Nash reveals today that two-thirds of businesses believe employment regulations are a threat to the UK labour market competitiveness.

Out of the 319 businesses questioned, which employ 1.9 million people in the UK, almost half (46%) said they have been affected by the new rules of the AWR. As a consequence most businesses (57%) have been forced to reduce the use of agency workers while 8% are no longer hiring temporary staff. Only 3% have reported an increased use of agency workers.

The survey found that the new regulations are seemingly having a “detrimental” impact on work opportunities, with 12% of firms reducing headcount, and 17% preferring to increase overtime for existing staff rather than use agency temps.

Over a third of firms are now using more fixed-term contracts (36%) or other temping arrangements such as the ‘Swedish derogation’ model of paying between assignments in return for no equal treatment rules on pay or managed service contracts (27%).

The survey claims that the AWR has made the use of agency workers more complex, overall reducing opportunities for contingent staff. Higher costs, compliance burden and increased risk of tribunal claims all play a part in this, according to the CBI, which had originally opposed the introduction of the AWR.

The full survey can be downloaded here.

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