The CBI has set out its analysis of the impact of the Agency Workers Regulations (AWRs) a year after they came into force, in compliance with an EU directive.
Neil Carberry, CBI director of employment & skills, said: “Agency jobs are a crucial way into employment both for people looking for flexible work, and for those seeking experience and a way into the workforce. But 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 are thought to have cost businesses more than £1.5bn in their first year, but temps have not reaped the rewards " instead, the vast majority of this cost has paid for paper-pushing to ensure compliance. This has in turn led to a reduction in temps hired in eight out of nine months in 2012, despite a rise in permanent staff being hired.
“We cannot afford to be complacent, given that we would expect increased demand for agency temps in uncertain economic times, not a drop. The government must not shy away from a review of all aspects of the regulations that are left to the UK to decide. Given the very significant costs of complying with the EU directive, we should be bold in stripping out needless administration that threatens hiring and does nothing to benefit temporary workers.”
CBI research has shown that 57% of firms that use temporary workers have reduced their use as a result of the regulations. Only 3% have increased their use, while 8% have stopped using temps all together.
Research found that 38% of agencies reported a decline in assignments as a result of the regulations. 18% reported an increase. Some 62% of agencies reported a negative experience of the regulations.
The CBI has listed aspects of the regulations that it wants the government to address, including:
- Streamlining the definition of pay to allow for easier comparison
- Simplifying the 12-week qualification period so that those on short-term assignments aren’t caught up in the regulations
- Removing any elements that go beyond those required by the directive and UK implementation agreement
- Stripping out the incentive in the regulations to lodge tribunal claims.