regenerating competitive advantage as profound change hits the uk staffing and labour market
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Interested in finding out more about the impact of Agency Workers Regulations in the UK? This article co-authored with James Lucier provides an simple summary and debates how organisations can regenerate competitive advantage by thinking differently to the way they source their talent.TRANSCRIPT
TALENT AGILIZATIONRegenerating Competitive Advantage as Profound Change Hits The UK Staffing and Labour Market
James Lucier & Ian TomlinUS Tech Solutions Ltd
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
Profound Change
Profound change is about in the UK Staffing and Labour Markets over the last year, driven in large part by the Agency Workers Regulation of 2011.
At the same time the Flexible Work Commission of 2012 reports other factors driving change, including the changing face and make-up of the workforce and how work is viewed.
As you consider this change, what will your response be? How will you meet the challenges of change? More importantly, how will you leverage the opportunity to regenerate strategic competitive advantages for your organisation?
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
Agency Workers Regulation
“The Most Profound Change Ever Seen in The UK Staffing Market”
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
Agency Workers Regulations
The Agency Workers Regulations (AWR) came into effect on Oct. 1, 2011, heralding the most profound regulatory change ever seen in the U.K. staffing market.
The aim of the AWR is to protect temporary agency workers by ensuring they have a right to equal treatment in basic working and employment conditions, as if they were employed on a permanent basis after 12 weeks’ service in the same job.
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
Alternative Strategies
Equal Pay from Day One
Employers may cut bureaucracy by paying temporary agency workers the same rates as permanent workers from day one of the assignment. Research from law firm Eversheds suggests that 25 percent of employers are introducing equal rights for all agency workers from day one in order to reduce risk and administration costs. For those employers using mostly highly skilled agency workers, such as IT contractors and engineers, this is a rational and practical choice, because these types of temporary workers are probably already paid comparable or even higher rates than equivalent permanent staff.
Swedish Derogation
While this has been misleadingly referred to as a loophole within some parts of the British media, the derogation is a legal option under the AWR. The term refers to an opt-out negotiated by Sweden when the AWD was debated within the EU. It means that AWR rights to equal pay do not apply when the agency worker is directly employed on a permanent basis by the temporary work agency. However, under the AWR, derogated agency workers must be paid at least 50 percent of their contract rate when between assignments —based on the highest rate of pay received in the previous 12 weeks of work.
In-House Agency
An employer may set up their own in-house temporary agency, as the AWR only applies to agency temporary workers who are supplied by a third party. One high-profile employer going down this route is the Royal Mail, the U.K.’s postal service. It has created its own agency called Angard Staffing Solutions
Source: Staffing Industry Analysts
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
The Offshore Option
Government estimates put the costs of the new regulations at £1.5 million per year. According to data gathered in the government’s Labour Force Survey, the average agency temporary worker gets five fewer holiday days a year than a permanent employee and earns on average 68 percent of the pay of permanent workers — a 32 percent pay gap. A recruitment consultancy, Reed, carried out an analysis of 30 companies and 30,000 agency workers across 1,300 roles to assess the impact of the AWR and concluded that employers will face a 5 percent increase in annual pay costs.
So, for better or worse, employers must consider the value of offshoring arrangements, and not just to locations commonly thought of for offshoring. One interesting outcome of the adoption of this legislation is that it means the U.S. is the only major staffing market in the world where employers can legally pay a lesser wage to an agency temporary worker compared to a permanent employee working in an equivalent role.
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
Flexible Work Commission
A Commission of Employers, Recruiters, Think Tanks and Academics to Assess the Profound Changing Nature of Work in the U.K.
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
View of Work is Changing
Flexible Work Commission
In early 2012, the Recruitment & Employment Confederation convened the Flexible Work Commission, bringing together employers, recruiters, think tanks and academics to assess the changing nature of work in the UK. The Commission, chaired by David Frost CBE, former Director General of the British Chambers of Commerce, has spent the past nine months speaking to employers across the UK about their views on, and approach to, flexibility.
The result is a report and series of recommendations that set out the real business case behind flexibility in all its forms, make clear the value of flexible work to business competitiveness and job creation and pave the way for the expansion of flexible working throughout every sector of the UK economy.
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
Key Findings
• Businesses which adopt flexible working arrangements are better able to attract and retain top talent.
• Less traditional workforce structures such as the use of temporary and part-time contracts helps businesses gain a competitive advantage within the market place.
• Recruitment agencies must advise employers on job design and flexible work options; help their clients improve job descriptions and advertisements to reflect flexible options available and plan bespoke solutions in line with business need.
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
Call to Action
Excerpts of comments:
This report, and the recommendations within it, are a call to action. The view of work in the UK is changing. Flexibility is growing in every sector, at businesses of all sizes.
Part-time working, contracting and other flexible solutions have been a significant factor in keeping people in work and companies in business during this recession.
The UK has a competitive advantage in its flexible labour market and by enhancing and promoting the benefits of flexibility to all, we can leverage this advantage to create more, and better, jobs in the UK.
Kevin Green, REC Chief Executive
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
About US Tech Solutions Ltd.
Trusted Advisor and Global Solutions Partner to Fortune 500® / Global 2000 Companies and the World’s Most Admired Brands
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
Trusted Advisor and Global Solutions Partner
VISION
We aim always to be your first choice for providing labour advisory, managed services and global talent for your organisation
UK Corporate Centre -25 Canada Square, London
•Domain-led labour consultancy and global solutions partner with 12-year track record of excellence
•Operating in 5 countries; 2,200+ consultants
•Reputation for solving labour challenges no other organization can resolve
•Accessing a global talent community to provide the most talented labour on-demand
•Applying unique technologies and analytics to manage temporary labour suppliers, reduce cost and mitigate organisational risk
•Developer of Talent Agilization – talent supply chain architecture and workforce strategies
•Global presence: US, UK, Canada, Singapore and India
•ISO 9000 certified , ISO 14000 certified, CMMI Level 3 certified
©US Tech Solutions, Inc. and US Tech Solutions Ltd., 2012.
Award Winning Performance and Service
As a result of our daily commitment to excellence and actual performance in service to our clients, we have been recognized in the business community and media with numerous awards and accolades, including:
• Deloitte “Fast 500” (multiple awards)
• Diversity Business “Top U.S. Business” (multiple awards)
• INC 500 “Fasting Growing Firm in North America (multiple awards)
• Staffing Industry Analyst “Largest Diversity Firm Award” (Top 30)
• VOLT “Supplier of the Year 2011” (multiple categories)
SELECT CLIENTS
Informed Discussion
In the UK:Ian Tomlin,Country Director – [email protected]: 0207 0431940 #305
In the U.S.:
James Lucier
VP – Global Workforce Solutions
Tel: 813-784-0070
For an informed discussion about how you can respond to the profound changes in the UK labour and staffing market and apply Talent Agilization architecture and strategies to regenerate competitive advantage in your organisation…