Has AWR Negatively Impacted Temp Labour Hiring in the UK?

May 2, 2012 | Leave a Comment By Tim Woodall

The end of March marked six months since Agency Worker Regulations (AWR) came into fruition across the UK. Recently two reports have appeared touching upon the impact of AWR on hiring trends among the temporary workforce. The first, from the Recruitment and Employment Confederation (REC), drew the conclusion that a recent drop in temporary hiring (and rise in permanent recruitment) was attributable to AWR. Conversely, the annual Navigator report by Randstad, used case studies to demonstrate AWR has had no negative impact on the use of temporary labour.

The different conclusions can largely be explained by the context of each study. The drop in temporary hiring reported by the REC is not surprising when taking into consideration the UK economy registered negative growth during Q4 in 2011 partly due to a slowdown in financial services, a mature user of temporary labour.

Randstad’s conclusions are similar to those we at IQNavigator are seeing amongst our UK clients – the use of temporary labour remains consistent with few, if any, changes to the pay of temporary resources. The majority of changes are directed toward standardising compliance policies and procedures around the roles temporary resources fill and quickly being able to map those roles to their permanent equivalents.

Ahead of the introduction of AWR, there was understandable concern the new regulations could make it less attractive for employers to invest in the temporary workforce. While there are conflicting reports about what effect AWR has had in that regard, from our perspective the effects have so far been minimal. In fact, our clients have been able to quickly react to the standardising changes mentioned above in part because they utilize a Vendor Management System (VMS). Vendor Management Systems usually prove highly useful to organisations that want to standardise and automate temporary labour policies, provide real-time visibility into their temporary labour resources, and mitigate risks associated with complying with new laws such as AWR. This usually results in significant savings on both the time and back-end costs organisations may incur in complying with AWR, and in my opinion is a mitigating factor of why our UK-based clients have not made a noticeable reduction in temporary labour investments.

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