Despite early forebodings about the possible negative impact of the Agency Workers Regulations on PAYE umbrella contractors, the latest evidence from the Recruitment and Employment Confederation suggests that demand for contractors and other temps remains strong.

Amidst reports that January might see tens of thousands of contractors who work through umbrella companies out of work, the REC/KPMG Report on Jobs has recorded only a minor dip in temporary billings during the month, which it believes is more attributable to general economic conditions than to the AWR.

Moreover, the vast majority of employers (87%) are planning to maintain or increase their temporary staff over the next 12 months, the REC’s AWR Monitor reveals. Only 13% said that they anticipated reducing their use of temporary workers. Although the AWR’s ‘equal treatment’ entitlements kicked in over Christmas, there was no flurry of queries or requests for information from workers.

Tom Hadley, Director of Policy and Professional Services at the REC, said:

“It is now over 100 days since the AWR came into force. Despite the slight dip in the number of placements highlighted in last month’s Report on Jobs, overall demand remains strong. Temporary and contract staff will continue to provide employers with a key means of bringing in the right skills at the right time.”

He added “There is no doubt that the regulations have created significant cost and resourcing implications for the industry but the priority has been to reassure client organisations over the ongoing viability and benefits of using agency staff.”

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