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Agency workers need equal treatment

Agency workers are paid significantly less and have much lower levels of job quality than directly employed staff according to a new report released today (7 May 2008).

The study, entitled ‘Agency Working in the UK: What do we Know?’ has been conducted by academics at the Universities of Bradford, Leeds and Kent. It coincides with discussions in Parliament over a Private Members’ Bill which would grant agency workers equal treatment to permanently employed workers in comparable jobs.

Drawing on data from the 2007 Labour Force Survey and the 2006 Skills Survey, the report provides a clear picture of the current state of agency working in the UK.

It finds that, on average, agency workers are paid £7.80 per hour compared to £11.47 for permanent workers, a difference of 32 per cent. This gap is higher for men (41 per cent) and lower, but still significant at 19 per cent for women. Furthermore, it is not the case that these lower wages are entirely attributable to the characteristics of those undertaking agency work. After controlling for a wide range of range of factors that affect wages, agency pay is 10 per cent lower per hour. This gap is 12 per cent for men and 6 per cent for women.

The report also sheds light on the number of agency workers and the characteristics of the agency workforce, to debunk many of the myths that have become the hallmark of the long-standing debate between government, employer representatives and unions over proposed regulation of the agency sector.

The study finds that there are 250,000 agency workers in the UK, around 1 per cent of the employed workforce. This figure stands in contrast to the 1.4 million estimate of the agency workforce compiled by the Recruitment and Employment Confederation, a figure which has been used by the CBI to claim that regulation of the sector would cost around a quarter of a million jobs.

Two thirds of agency workers are concentrated in clerical, semi-skilled and unskilled occupations, whilst only one in five are found in managerial and professional occupations. The average length of tenure for agency workers is 4.5 months, and 73 per cent of agency workers have tenure levels of less than a year.

Dr Gary Slater, Senior Lecturer in Economics at the University of Bradford and co-author of the report, said: “The CBI has called for equal rights to be limited to agency workers with tenure of one year or more. Our study shows that almost three-quarters of agency workers would be excluded from coverage if such a restriction were to be put in place, which surely runs counter to the aims of the Bill to provide equal treatment.”

Dr Chris Forde of Leeds University Business School and co-author of the report, said: “This is not to suggest that the agency workforce is quantitatively unimportant: far from it. Agency working has grown in importance over recent years. Our figures, drawn from nationally representative data provide a reliable basis for comparing the experience of agency workers with other groups in the labour market.”

In terms of the characteristics of the agency workforce, it is not the case that agency work is dominated by returners to the labour market, women, or full-time students, as argued by the agency industry. Black and minority ethnic workers and new arrivals in the UK are over-represented in agency work compared to permanent jobs. There are close links between agency work and recent migration patterns. 5 per cent of the agency workforce has arrived in the UK since 2004, and 80 per cent of these agency workers are from the EU accession states.

The report also points to lower levels of job quality amongst agency workers compared to permanent workers, along a wide range dimensions. Compared to both other temporary and permanent workers, agency workers are less satisfied in their job, have less variety and discretion over their work, are less likely to learn new things at work and are less likely to be underutilising their skills. They are also less likely to have a say in decision making at work and are less likely to be promoted.

The Bill to provide temporary agency workers with equal treatment to directly employed staff reaches the Committee stage of discussions in the House of Commons on 7 May 2008.

Commenting on the implications of the report for these discussions, Dr Forde remarked: “Our research shows that there is clear cause for concern about the position of agency workers in the UK. They are paid significantly less than directly employed staff and have lower levels of job quality across a range of dimensions.

“Equal treatment for fixed-term contract workers and part-time staff has been assured through recent European directives and our study points to the urgent need for similar protection to be extended to agency workers.”

Oliver Tipper | alfa
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