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UK — Over half of recruiters would consider licensing for the recruitment industry

28 June 2010

Votes have now been counted following the national debate hosted by the Association of Professional Staffing Companies (APSCo) at the headquarters of the CBI in central London.

Over half of recruiters (56%) would consider licensing for the recruitment industry following an electrifying national debate hosted by the Association of Professional Staffing Companies (APSCo) at the headquarters of the CBI in central London.

40% of recruiters were firmly opposed to licensing, with the remaining 4% undecided.

Over half of APSCo members (56%) voted in favour of the key motion: Should APSCo explore the potential for a clearly defined, well-managed and appropriately priced licensing system for the UK recruitment sector?

In advance of the Debate, which the REC declined to attend, the REC spelled out its clear and unequivocal opposition to any extension of the current Gangmasters Licensing regulations into other sectors of the industry in a letter to Dr Vince Cable, the Secretary of State for Business. Kevin Green, REC Chief Executive, said, "There have been calls by the Trade Unions and other parties for an extension of licensing across the industry. The REC opposes this as we believe there are more effective ways of raising standards, tackling rogue businesses and protecting workers."

The UK staffing industry already has a partial licensing structure. Companies operating in the agricultural and food-processing sector are obliged to obtain a licence under The Gangmasters (Licensing) Act 2004 while nursing agencies have, for many years, been required to be licensed as more recently enshrined in the Care Standards Act 2000.

Staffing Industry Analysts has researched different licensing regimes across the world as part of its analysis of differing regulatory structures. Licensing is actually the norm rather than the exception in most international staffing markets. Of those markets with a regulatory framework for temporary staffing, only two, Estonia and New Zealand, have no licensing at all while partial licensing such as we see in the UK is also a feature of the other important English-speaking markets, the US and Australia. The US requires licensing for the provision of temporary staffing in 4 States and licensing for the provision of permanent placement in 14 States. Elsewhere in the world, staffing companies are required to obtain licenses to operate including in the important French, German and Belgian markets.

Adam Pode, Director of Research at staffing Industry analysts said, "We see quite a wide variation in the types of licensing arrangements staffing companies are obliged to operate under as well as significant variation in fees and fines. A license may oblige the staffing company to report their activities to statistical authorities, provide financial guarantees, or for the licensee to have a minimum level of qualifications and experience." While some countries operate a 'lite' licensing regime, at the opposite extreme is Greece where the cost of financial guarantees is so high that only nine staffing agencies are actually licensed.

The Dutch staffing market abandoned its licensing scheme in 1998 but replaced it with a system of self-regulation administered by ABU, the national staffing association, and agreed with social partners. This system, which even covers issues such as minimum pay, provides ABU with legal enforcement powers and ABU believes that they are more effective and better resourced than government to do this.

John Nurthen, General Manager, Europe for Staffing Industry Analysts said, "The subject of licensing does divide opinion but what most agree on is that the staffing industry needs to continue to improve professional standards and gain better social acceptance. Many national associations which operate under licensing regimes believe that licensing plays a crucial role in raising standards while others, such as the REC, are concerned that it increases costs and bureaucracy while failing to properly eliminate rogue traders. On a global basis, there's no common consensus at all on this point so it will be interesting to see how the debate develops in the UK."



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