Are you tempted to temp?
Published: 02 Nov 2011
The use of temporary agency workers in the UK rose more than 10 per cent in March, compared with the same period last year, with sectors such as construction growing 47 per cent and retail up 12 per cent.
While having a highly flexible workforce to plug staffing gaps is a way for British business to remain competitive, for employees the growing use of temporary staff makes for an uncertain working life.
However, it is something that can work for you. As temporary placements are often a way to get a foot in the door of an organisation, they are a way for jobseekers to prove themselves. Also, employers fearful of making an expensive recruitment mistake get a chance to "try before they buy".
That is why employers often recruit from their temporary staffing pool, giving temps a better chance of permanent employment than other candidates as they are a known quantity. Temping is often seen as a poor relation to a permanent job - however, this is often not the case. For senior managers, professionals, IT contractors, engineers and those in financial services, contract rates are usually far higher than the pay given to permanent staff.
Although less skilled workers often lose out by temping, the new Agency Worker Regulations (AWR), which come into force in October, will require temps to be paid the same as directly employed workers after 12 weeks with the same employer. So they will, in future, be on a par both in terms of pay and holiday.
"If you look back on past recessions, temporary worker numbers always go up because employers are reluctant to commit to permanent hires," says Sally Hewick, chair of the Recruitment and Employment Confederation (REC) Industrial Group and also general manager of recruiters Right4Staff. "However, the majority of our clients do look at their temporary workers when recruiting. After all, they do not have to advertise for a new recruit and have already spent time training and skilling these people, so it makes financial sense.
"We are now starting to see a trend - which is just emerging, so it won't yet appear in employment statistics - of employers converting temporary workers into full-time employees." Steven Kirkpatrick, managing director of Adecco, adds: "With over a million people in the UK currently employed in temporary roles, it's vital that employers and temps understand how the forthcoming legislation will impact them.
"In recent years we have seen a trend towards companies using temporary contracts as a way to 'try before you buy' with new staff, who are often offered a permanent role later down the line. We'd expect to see increasing numbers of people going down this route while the market continues to stabilise."
Matthew Sanders, CEO of de Poel, the leading procurer of temporary agency labour which compiled the statistics on the sharp rise in temporary workers, says that much depends on the sector you work in.
"Temporary agency workers are the backbone of UK plc as they offer a rapid solution to market fluctuations, often filling skills gaps at short notice," he adds.
Agency workers rules will help lower paid
Regulations covering the holiday rights and pay of temporary workers are about to change and while this may mean more costs and red tape for some employers, it could change the view of temping as a career alternative and lead to a better calibre of candidate.
"Organisations need to start preparations for the Agency Workers Regulations now, otherwise there could be a huge increase in the cost of temporary labour," warns Sanders.
While there has been some scaremongering that AWR will lead to a decrease in the number of temporary workers or even force employers to give temporary workers permanent jobs after 12 weeks, recruiters say that once businesses get to grips with the new regulations it should not impact on job numbers.
"The nature of the UK market is that we rely on a fluid workforce and that is not going to change," says Hewick of the REC. "Businesses will not be forced to give temporary workers jobs after 12 weeks, they will simply have to ensure they are paid the same as a direct employee and also have the same holiday entitlement. So it will be like any other legislation - a brief blip.
"Many employers already pay the same rates and when it comes to holidays temporary workers are already entitled to 28 days so they may get two days more if the employer gives permanent staff 30 days' paid annual leave. "Fears that employers will try to get round this by getting rid of staff before the 12 weeks are up are covered by anti-avoidance clauses.
"In fact, the AWR could make it more attractive for candidates to start temping as the regulations will set a standard for workers in terms of their rights regarding pay and holidays."
Gillian Econopouly, head of public policy at the REC, adds: "The impact of the legislation will depend on the sector. At the higher end of the jobs market, agency workers are paid more than permanent staff and are paid a premium for being flexible workers.
"For employers with staff at the lower end of the pay spectrum, the AWR will be more of a concern and there may be cost increases.
"Not only will they need to ensure equal rights in terms of pay and holiday after 12 weeks, they will also need to ensure shifts and shift allowances are the same so there will be more tracking administration, particularly if agency workers work through more than one agency for the same hirer. However, we do not see the need to take on temps and those on fixed-term contracts changing."
Skilled professionals are the biggest winners
The type of temporary worker who has benefited from UK plc's shift to a more flexible workforce is the skilled professional who works as a contractor.
"For example, in engineering and IT there has always been a reasonably tight labour market, which in the white collar arena leads to people working as self-employed contractors or freelancers," says Philip Higgins, the REC's engineering and technical chair.
"They work for themselves as one person limited companies or as self-employed freelancers, which is particularly attractive while skills are relatively scarce as they can earn more than they would as an employee.
"The situation is very different in client-led markets where skills are plentiful - for example, for clerical positions and work in call centres. For these positions, employers often maintain a core workforce and then flex up and down as staff are required. These are lower paid jobs and there is often a benefits trap as workers are required to sign on and off as temporary assignments end and start."