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This week marks the two year anniversary of the Agency Worker Regulations (AWR) coming into force. The Recruitment and Employment Confederation (REC) has used monthly data and the latest feedback from REC members to determine how the industry and the temporary work market has responded.
According to Tim Hadley, the Director of Policy and Professional Services at the REC, there has been little or no impact on the overall demand for temporary and contract staff. This had been the biggest concern; namely that the regulations would create so much additional cost and uncertainty that employers would stop using agency staff.
The latest data has been extremely encouraging. The latest REC/KPMG Report on Jobs shows temporary billings rising at the strongest rate in over 15 years. Looking ahead at future hiring intentions, the REC’s JobsOutlook shows that 96% of employers plan to increase or maintain their temporary workforce over the coming year.
Although demand has remained strong, the AWR created significant cost for recruiters. This has been in the form of increased training and HR costs, putting the right tracking systems in place and awareness-raising activities amongst clients and workers. Larger recruiters have estimated that the cost of implementing AWR runs into six figures. Most recruiters estimated the overall cost of implementation has been between £5,000 and £20,000.
There is an on-going need to raise awareness of the regulations amongst employers. One of the major challenges flagged by REC members is that employers have not always co-operated in terms of providing the right information on pay. The regulations are still seen as an ‘agency issue’.
The 12 week derogation period has not increased the ‘churn’ of temporary staff. Feedback from recruiters confirms that the initial concerns over employers systematically terminating assignments after 12 weeks have not been borne out. The initial data suggested a very marginal decrease in the average length of assignment, but this was most likely linked to the economy rather than AWR. Some recruiters have actually reporting an increase in the length of employment.
The predicted surge in tribunal activity has not materialised. This is something that the REC will continue to monitor closely. Recruiters have played a key role by raising awareness and addressing any misconceptions amongst workers.
The political debate is expected to rumble on. The REC believes that the Trade Unions will continue to hone in on ‘pay between assignment’ models. The recent Labour Party conference confirmed that we have a real challenge on our hands in terms of addressing residual mistrust of any form of work that is not permanent, full-time work.
In summary, the REC’s ‘elevator’ pitch on the impact of the AWR is that we could have done without it, especially as there has been a significant cost for the staffing sector. However, the on-going benefits of temporary and contract work for business and for workers have generally outweighed initial concerns over how the regulations would play out.