The compliance regulation imposed on temp recruitment agencies over the last five years has driven up the cost of employing temps by 4 per day per temp across the board. This is the assertion of Tom Atkinson, MD of CashFriday, the leading finance and payroll services provider to the UK recruitment sector.
Tom Atkinson explained during his talk to over 100 delegates on the Future of Agency Work at the Incomes Data Servicesí(IDS), Agency Workers Conference in London yesterday, ëTemp agency margins have increased from 19% to 24% since June 1998 but agency profits have generally remained the same or declined. This means that the hike of five points is an additional compliance cost borne by agencies due to regulations including such things as The Working Time Directive, Criminal Records Bureau compulsory usage and Tax Credit schemes to mention just a few. A simple calculation* shows the cost to be 1,000 per temp p.a. or 4 per day. This cost tends to be passed on to employers making temps more expensive for UK businesses. í
Atkinson referred to the CashFriday Margin Index which the company has compiled over the last 5 years from data gathered from its processing of hundreds of thousands of wage slips on behalf of UK temp agencies.
CashFriday is a specialist division of Lloyds TSB Commercial Finance Ltd.
* How the calculation is made :
temp placements account for in excess of 20 billions turnover p.a.
x 5% hike in margins = 1 billion
divide by the million temps on assignment at any one time = 1,000 per temp per annum, hence 4 per day.
Regulation adds approx. 4 per day to cost of temps
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