The Agency Workers Regulations 2010 ("AWR") brought the promise of increased rights and pay protection for agency workers. In reality, it appears that not only is the Swedish Derogation being heavily used, but client organisations are exploring other ways to side step the AWR.
In a recent survey by a large London law firm of 200 client organisations, 52% claimed that they would employ more fixed term workers, 37% aimed to set up their own in-house bank of temporary workers cutting out the middle man and 38% stated they would only use agency workers supplied through the Swedish derogation model.
It is no surprise that even Tesco has admitted to cutting back on agency workers since the AWR's introduction by taking on workers directly, albeit with less pay and benefits.
Prior to the AWR, the UK had a largely deregulated flexible labour market, however, could it be morphing into a hybrid system of fixed term contracts, in-house staffing banks and a place where client organisations only want to use agency workers supplied via the Swedish derogation model?
It is clear that the recruitment industry will have to adapt to a new breed of demanding clients who want agency workers who pose a 'more cost effective and less risky' option for them to use, such as those supplied under the Swedish derogation model and those exempt under the AWR. Inevitably, this will mean increased cost to the recruitment industry and more red tape.
It is important that the recruitment industry maintain a dialogue with client organisations to achieve joint solutions to their temporary staffing needs. Obviously, it is too early to be able to judge the real impact on the recruitment industry, however, one thing is certain, things will never be the same.