Many of the reports regarding the impact of the Agency Workers Regulations, one year on from its implementation, have suggested that they have not caused as big a problem for recruiters and employers as was initially anticipated. However, the CBI have reported that the regulations have actually cost UK businesses more than £1.5bn.
The CBI’s analysis of the impact of the AWR also found that 57% of firms have reduced their use of temporary workers due to the regulations, with 8% stopping using them altogether. Only 3% reported that they had increased their use. Overall 62% of recruitment agencies reported a negative experience of the AWR, resulting in 38% of them reporting a decline in assignments.
The CBI’s director of Employment & Skills, Neil Carberry, said that; “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.” He said that the £1.5bn it has cost recruiters has not seen temporary workers “reap the rewards”, instead he has called for a detailed government review.
“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.” This echoes the REC’s Kevin Green, who said the government have a key decision to make regarding the future of the AWR.
“The government should either hold a substantial review which looks at all the relevant issues including pay, assignment lengths, bonuses – or they should leave it alone. What we don’t want is businesses’ time and energy being wasted on a partial review that upsets the current system, creates uncertainty and could risk interfering with the work of agencies and employers making effective use of temporary staff and keeping the temporary labour market buoyant.”
ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.