While many organisations awaited the introduction of the Agency Workers Regulations (AWR) with trepidation, it is clear that the impact has been minimal. From our own research and AWR implementation work with clients, the feedback clearly shows that flexible staffing arrangements are firmly embedded within employer resourcing strategies.
Minimum cost increase
While the AWR was expected by some to have a significant cost impact, the reality has been very different. Our own analysis eight weeks after the first agency workers qualified for the AWR showed a cost impact of just 2.62% which mainly reflects the holiday increase.
Handle’s results for the first two months of 2012 reflect this - showing an increase of 16% in temp usage compared to the same period last year.
No silver bullets
Some of our clients have chosen to transfer some temporary workers to fixed term contracts believing this to be the best way of avoiding the AWR legislation. However, it is important to appreciate that unless there are special circumstances that can be justified, workers employed under a fixed term contract must be treated in exactly the same way as permanent employees including the same pay and conditions. In essence, this means that the outcome is much the same as compliance with the AWR legislation. Additionally, not renewing a fixed term contract is equivalent to dismissal – consequently, after two years of service; a worker would be entitled to full redundancy rights and from, April 2012, would have statutory protection for unfair dismissal.
Easing the burden – adding value
Agency workers on the other hand can provide a far more flexible resource and while there is a cost element, the key benefits are that all the administration and AWR compliance is dealt with by Handle. It is up to us to ensure that any agency workers we supply receive the rights that they are entitled to - taking the administrative burden away from you. To facilitate this, Emma Dadswell – Handle’s Business Operations Manager has been conducting compliance audits with our clients to ensure that they are up to speed. We’ve put a system in place which monitors a temp’s accumulated working time, notifies a client when a temp is about to qualify for AWR and then presents the impact of that change to the client.
It is also worth bearing in mind that simply terminating a temporary worker’s assignment at the twelve week qualification point could be construed as wilful avoidance. This is a risky strategy – anti - avoidance clauses within the AWR are very clear.
We have sought feedback from our clients to get their views on the impact of AWR. Sony Music Entertainment, who has worked with Handle consistently to provide agency workers, has found the legislation positive. Emma Adler, Head of Resourcing at Sony explained: “Temps are viewed as an important resource for the business – and if there was headcount budget they would be hired on a permanent basis. We undertook a full audit of our temp usage and the AWR legislation helped to drive our decision making. While some temps, if they had been in post for a long time, were taken on permanently or moved to fixed term contracts, there have been no exits and no restriction of the use of temporary workers. There haven’t been any budget implications as the average cost increase merely reflected the rise in holiday allowance. We have also seen some clear benefits from the AWR – for the temps it has meant a reassurance of equal treatment and more rigour around the temporary recruitment process and for the business it has made us look at the temps we have and agree that they are a necessary resource. The support we had from Handle was extremely useful – the process was clear and it meant that we didn’t have to think about any administrative burden that the new legislation may bring. My feeling is that companies should embrace the AWR – we are all in the same boat, there is no competitive advantage and temps are a great resource!”
Brendon, Handle’s Director of Office temps says: “The minimal cost impact does not appear to outweigh the enormous benefits gained. The compliance audit programme has also had the added benefit of further strengthening Handle’s client relationships. We have all been required to communicate more often to share information - resulting in increased transparency as well as stronger and better partnerships.