AWR 6 months on - Regulations have created rallying call rather than final call for UK's agency market, says REC

April 1st 2012 marks six months since the controversial Agency Workers Regulations (AWR) came into force. Although the new rules have created significant bureaucracy and cost for the UK's £25 billion recruitment industry, the demand for temporary and contract staff has remained strong and looks set to grow over the coming year.

Despite fears that the AWR could signal the death knell for the agency market, the UK's flexible labour market has so far proved resilient. Six months on, the current state of play is as follows:

* Data from the REC/KPMG Report on Jobs - which tracks the number of placements made each month - shows that the demand for temporary staff has remained steady since the regulations came into force last October.

* The REC's JobsOutlook report - which tracks the future hiring intentions - shows that 84 percent of employers plan to maintain or increase their temporary workforce over the coming three months. The stand-out statistic is that 31 percent of employers plan to actually increase their temp workforce with only 15 percent planning any sort of decrease. This indicates a potential net growth in the use of agency staff.  

* The longer term outlook is also positive with 89 percent planning to increase or maintain their temp workforce over the next 12 months. Within this, a significant proportion (26 percent) are planning an increase in use with only 11 percent pre-empting any sort of decrease.

* There have been very few early signs of workers instigating employment tribunals for alleged breaches of the new equal treatment requirements.

* Practical implementation challenges have included putting systems in place to track the 12-week qualifying period before equal treatment measures apply, establishing the correct pay rates and holiday entitlements and ensuring that employers co-operate with their recruitment partners to establish equal treatment measures.

* The main impact of the regulations has been in specific sectors such as industrial and driving where new supply models such as the 'pay between assignments' (Swedish derogation) contracts have been implemented. Specific issues have also arisen in the education sector due to holiday periods and issues surrounding teacher pay bands.

Reviewing the first six months, Tom Hadley, Director of Policy and Professional Services at the Recruitment & Employment Confederation (REC), says:

"These are complex EU regulations and implementation has not been easy. However, recruitment agencies across the country have got to grips with the new requirements and have ensured that flexible working options continue to provide a crucial outlet for workers and businesses.

"Looking ahead, the benefits that flexible staffing arrangements provide will continue to outweigh the additional administration and uncertainty that has been created in some sectors. At the same time, we will continue to call on Government to review and streamline some of the bureaucracy for agencies and their clients.

"Rather than being a final call for agency work, the AWR has been a rallying call for the UK recruitment industry to demonstrate its resilience and ability to make things work on the ground".