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News: Impact of AWR 1 year on? Depends who you talk to

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1st Oct 2012
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Research on the impact of the Agency Worker Regulations a year after their introduction has thrown up some deeply contradictory findings about the desire of employers to take on temps.

One survey indicated that fewer agency personnel have been taken on as a result of the legislation, while another found that it had made no difference whatsoever.   According to a poll undertaken by employers’ lobby group, the CBI, which is currently waging an on-going campaign to try and persuade the government to ‘cut more red tape’, some 57% of firms have reduced their use of agency workers as a direct result of the regulations being implemented.   This figure compares with some 8% that have stopped using temps altogether and 3% that have taken on more.   A similar survey among recruitment agencies also indicated that 62% had had a negative experience of the regulations, with 38% seeing a decline in the number of their assignments compared with 18% that witnessed a rise.   Neil Carberry, the CBI’s director of employment and skills, said: “One year on from the introduction of the regulations, the business verdict is that they are a drag on job creation in this vital sector.”   The regulations were thought to have cost businesses more than £1.5 billion in their first year but it was not temps themselves who had reaped the rewards, he attested.   Instead the vast majority of the cost “has paid for paper-pushing to ensure compliance”, leading to a cut in the use of agency workers in eight out of the nine months of 2012 “despite a rise in permanent staff being hired”, Carberry claimed.  Limited impact  But a comparable study conducted by the Recruitment and Employment Confederation came up with quite different findings.   It revealed that a mere one in 10 employers had either stopped using or significantly reduced the number of temporary staff that they took on in the seven months to April of this year, while a further 18% said that they had hired only marginally fewer.   Of this sample, two thirds said that the number of temps that they took on was reduced because of continued economic uncertainty and weak growth rather than as a result of the regulations, however.   The REC’s chief executive Kevin Green, said: One year in, it’s clear to use that there have been only limited problems for businesses, some real positives for workers and that it’s recruitment agencies across the UK who have really absorbed the administrative burden and costs associated with the implementation of the new rules.”   Because the minority of employers that cut their temp usage did so because of the wider financial climate, he said that he expected demand for agency staff would pick up as growth returned.   Indeed, the latest data showed that the outlook for temps was already starting to improve even though the UK was still officially in recession, Green said.   What this meant was that newly appointed employment minister, Jo Swinson, had to make a careful decision about the future of the regulations. Either the government would be advised to hold a substantial review, looking at key issues ranging from pay and assignment lengths to bonuses, or leave things alone.   “What we don’t want is businesses’ time and energy being wasted on a partial review that upsets the current system, creates uncertainty and could risk interfering with the work of agencies and employers making effective use of temporary staff and keeping the temporary labour market buoyant,” Green warned.    

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