The latest KPMG.REC report on jobs, which tells us that unemployment is continuing to rise despite a small increase in permanent placements, signals an end to the myth that regulation does not stifle growth. Historically the temping industry has worked well to help employers, never more so than at times of recession. Particularly when consumer confidence is forecast to rise, employers take steps to increase productivity often using temporary workers to maintain flexibility. But it would appear not so this time round.

With the number of temp placements suffering from a reported “sharper decline” according to KPMG, and the REC, which had polled 400 recruitment businesses, accepting that the decline is “as employers come to terms with the Agency Workers Regulations” (AWR), one culprit is clear, says the Association of Recruitment Consultancies (ARC).

Adrian Marlowe, chairman of ARC, said “jobs are being lost and people’s lives directly affected because of the AWR, which requires employers to give equal pay to temps after 12 weeks. The country clearly cannot afford to have this kind of EU driven regulation in place at the best of times let alone when it should be all hands to the pump to buoy up business and grow the economy. The laws were facilitated in 2008 at a time when the UK still had significant growth, but the circumstances are now no longer the same. Unsurprisingly where employers are faced with higher costs they are avoiding them wherever they can.”

ARC, whose members generate 10% of the recruitment industry’s turnover, has argued consistently for the Regulations to be reviewed as soon as possible with adjustments made that would reduce their negative effect. It has recently pointed to the fact that the very people that the unions wanted to help are not receiving any tangible benefit, with some being laid off prematurely because of the rules.

Marlowe concluded “the reality is that those who advocated the introduction of these rules, and a short 12 week qualifying period, should accept that it has not helped ordinary working people who want to find and stay in jobs.  The qualifying period at the very least should always have been much longer. A total review is required now, not next year.”