At the Helm

Has AWR Negatively Impacted Temp Labour Hiring in the UK?

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.

Agency Worker Regulation (AWR) in the UK contingent workspace

By
Tim Woodall

The implementation of the Agency Worker Regulation (AWR) has, without a shadow of doubt, been one of the hottest and most talked about topics within the UK contingent workspace over recent months. AWR represents a huge shift in the rights of agency workers, granting temporary staff the right to equal access to shared facilities such as car parks and canteens on Day 1 of their assignment and equivalent pay and holiday allowance to their permanent counterparts after 12 weeks (comparator).

For some industries, these regulations are unlikely to pose too many challenges. High skilled contractors, for example, are typically paid more than their permanent counterparts. However, when it comes to the blue collar population or companies that use temporary staff in administrative and junior roles, AWR is likely to cause considerable headaches and increased costs.

As the burden on compliance rests ultimately with the hirer, it is crucial that companies obtain a complete picture of their contingent workforce and visibility into pay and bill rates before an effective strategy can be implemented. Companies that had a Vendor Management System (VMS) in place prior to the regulation are now already reaping the rewards as not only has the hard graft of identifying in-scope contractors and pay rates already been done, but the information is easily reportable. In addition, a good VMS system enables the standardising of job titles, a process that further eases comparator identification.

IQNavigator has worked with its UK client base to enable efficient compliance with the regulations. Over the last few months, we have developed a solution that maps across comparator information into its job templates ensuring that as soon as a new job requisition is posted it is already AWR compliant. In addition, using our Customer Defined Fields we can capture and record a named comparator and a contractor’s tax status.

With Ireland set to implement the Directive soon, there has never been a better time for companies to be able to use the changing regulatory landscape to put in a place a Vendor Management System that will provide the necessary visibility to ensure compliance with AWR.