Yesterday, my colleague, James Caan, CEO of Hamilton Bradshaw, wrote an opinion piece for his LinkedIn group, The James Caan Recruitment Forum, reviewing the impact of the Agency Workers Directive (AWR) on hiring companies and recruitment agencies. The article takes a holistic view of UK companies’ responses to the EU regulation and offers James’ personal opinion on the matter.
I believe the insights that James brings are well worth reading and taking on board, so much so that I deem it appropriate to post on my blog! I hope you enjoy the piece…and please feel free to offer your own observations on the impact of the AWR on your recruitment business…
“Roughly 6 months down the line and a lot of noise surrounds the effectiveness of the Agency Workers Regulation (AWR). Brought in through the EU courts it was hailed as “the most significant legislation ever to hit the UK’s private recruitment industry” by the REC – yet has this turned out to be the case?
“Three surveys were recently conducted by Adecco, Everclear (a law firm) and XpertHR (an HR intelligence resource company) and all suggest that the people affected most by the AWR are temporary workers; the people it was intended to affect the most. The underlying theme of all these surveys is that organisations are doing rather well at avoiding the costs, and even if they are hit, the extra expensive is negligible for the vast majority. Have you been losing revenue as a result of increased expenses?
Everclear’s report found that around a 1/3 of surveyed companies have experienced a 5% rise in costs, and less than 3 in 100 have been on the end of rising costs above 25%. Those of you that have worked in the recruitment industry for a number of years will have undoubtedly felt a sense of foreboding in terms of the impending regulations. Everclear reported that four years ago 80% of respondents feared a hike in costs as a result of the AWR, which explains why many recruiters feared a knock on effect of reduced business. Instead temporary placements are on the rise across the UK, albeit at a slightly slower rate of growth in the past month (which KPMG cautiously attributes to the AWR), and our industry remains well-placed to continue to grow.
“According to Everclear’s report the biggest concern for hirers is how to effectively monitor agency engagement, with over ¼ surveyed commenting on the challenge. But if you flip the coin this can serve as an opportunity to many recruitment agencies as you can look to enhance client relationships. Consider positioning yourselves as experts on the matter of regulations and you may see improved client retention. As Tom Hadley, REC Director of Policy and Professional Services comments, “Implementation has been a huge challenge and the regulations have created specific issues in a number of sectors. However, the AWR has also provided an opportunity for many agencies to build stronger links with clients and to demonstrate their ability to make the new rules as workable as possible”. Can you think of any other opportunities for agencies to take advantage of as a result of the AWR?
Adecco’s survey found that more than ¾ of organisations have experienced zero impact as a consequence of the AWR, and XpertHR’s survey found roughly the same proportion sustain that it has had no detrimental impact on their ability to resource. Having said that, nearly 1 in 5 surveyed companies have taken action to cut back on agency hiring claims Adecco, yet this could easily be a reaction to wider economic forces and not just the AWR.
“Furthermore, in a somewhat counterintuitive turn of events, 65% of employers are starting to offer equal rights from day 1, according to Adecco. This mitigation of bureaucracy is good for everyone involved and is actually working to reduce costs for companies in the long-term.
“Overall it seems to me that we are yet to see the full financial brunt of the regulation for the recruitment industry. Most of your clients are taking their time with decisions affecting workforce support. Yes, a lot of work is being done by companies to avoid the increasing expenditures, but the AWR is far from the harbinger of disaster many touted it to be.
“Today I would like to know if your agency has been detrimentally affected by the AWR and if so why?”