What A Difference A Year Makes
6th September 2012
This time last year the potential impact of the Agency Workers Regulations (implemented on 1st October) was a hotly debated topic within the recruitment industry. There was speculation that the Regulations would create a negative impact on the temp market, indeed we wondered ourselves whether they would make any difference to our client relationships and revenue streams, given the potential for increased costs and the additional administrative burden.
The Regulations have not changed our business. Perhaps, we've been fortunate because our recruitment practice is straight forward. We don't work under the Swedish derogation model or via personal service companies and many of our clients operate in the oil and gas sector, where temporary workers generally earn more than their permanent counterparts.
Rather than implement radical changes to their hiring methods our clients continue to recognise the quality of our agency staff and have taken one of two approaches. Collaborate with us to establish equal treatment or, perhaps where there is less knowledge of the Regulations, follow our guidance to establish equal treatment. Both options have provided an opportunity to add value to the client relationship through effective and regular communication.
Certainly, almost all our agency workers have benefited, perhaps not financially, but definitely in their right to the same number of holidays as an equivalent permanent role holder. Many of our clients have decided to provide the same employment conditions from day 1 of an assignment, irrespective of the qualifying period and we have also not witnessed "churn" of agency workers before the end of this 12 week period.
Sound simple? Well maybe it has not been quite that easy. There are a few cases where clients refused to meet the equal treatment costs, eroding fee margin. Implementation and the ongoing administrative burden is significant, particularly for our in-house payroll team which holds responsibility for tracking qualifying periods and implementing pay and holiday equalisation. And there have been, and will continue to be, tricky instances where limited company contractors and hirers (our clients) disagree on the status of employment, which potentially impacts IR35 status and conflicts with bonus payment entitlement under the Regulations - emotive issues.
Our experience mirrors the findings published by the Recruitment and Employment Confederation that the longer term outlook for maintaining or increasing agency workers is positive. This is heartening and sustains us for the next wave of legislation to affect agency workers, the automatic enrolment onto a qualifying pension scheme, oh, I can hear the worry beads already.......