The CBI today (Monday) set out its analysis of the impact of the Agency Workers Regulations (AWRs) a year after they came into force, and its priorities for the upcoming Government review of the regulations.

Neil Carberry, CBI Director of Employment & Skills, said:

³Agency jobs are a crucial way into employment both for people looking for flexible work, and for those seeking experience and a way into the workforce.

³But 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.

³The regulations are thought to have cost businesses more than £1.5bn in their first year, but temps have not reaped the rewards – instead, the vast majority of this cost has paid for paper-pushing to ensure compliance. This has in turn led to a reduction in temps hired in eight out of nine months in 2012, despite a rise in permanent staff being hired.

³We cannot afford to be complacent, given that we would expect increased demand for agency temps in uncertain economic times, not a drop. The Government must not shy away from a review of all aspects of the regulations that are left to the UK to decide. 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.²

The CBI has identified several key areas where the government should focus its efforts to simplify the regulation, including:

• Streamlining the highly complex definition of pay to allow for easier comparison
• Simplifying the 12-week qualification period so that those on short-term assignments aren¹t needlessly caught up in the regulations
• Removing gold-plating where the regulations specifically go beyond that required by the directive and UK implementation agreement
• Stripping out the perverse incentive in the regulations to lodge opportunistic tribunal claims

Key stats about the agency sector in the UK:

• CBI research has shown that 57% of firms that use temps have reduced their use as a result of the regulations. 3% have increased their use, while 8% have stopped using temps all together
• TEAM research found that 38% of agencies reported a decline in assignments as a result of the regulations. 18% reported an increase
• The same survey found that 62% of agencies reported a negative experience of the regulations
• BIS research prior to the implementation of the regulations showed that agency workers received, on average, 96% of the pay of comparable employees.