Europe Week: Spain and temporary agency workers

Last month unemployment in Spain hit a record high. Official figures show the amount of people out of work in the country hit 5.64 million – a rate of almost 25%.

The country has the highest unemployment rate in the EU and in the first three months of the year 365,900 people lost their jobs. However, a separate report noted that 90% of employment contracts signed are now temporary ones, equating to a strong demand for temporary agency workers.

Many of those that are working as temps are “clueless” about their contracts though. According to the country’s National Statistics Institute about 1.78million temporary workers are unsure off how long their contracts will actually last. Leaving a large amount of very vulnerable workers.

The survey found that the majority know their contract is due to exceed one month, but are unable to say when their contract will be terminated. Some had no idea their were contracted for less than a month and others knew nothing in relation to the length of their contract. This leaves workers open to exploitation and also gives a vastly negative assumption of the market.

Spanish labour reforms earlier this year caused tension in the jobs market, with many workers striking and threatening to go abroad to find work. Changes have been made regarding employment terminations, redundancies and collective dismissals, aimed at making the labour market more flexible. But, the President of Adecco in Spain doesn’t think it is enough for temporary agency workers…

He believes that the reforms are “good” but that the Government still needs to improve the management of temporary workers, who are “chained” to different companies. He also wants temps to be given more training – “We must understand that the way one worked 30 years ago is no longer useful.” This corroborates the figures that show demand for highly skilled workers in the country is significant.

Europe week: Germany and temporary agency workers

Germany is being praised for playing a large part in the Eurozone avoiding recession today with stronger-than-expected growth. The country has been one of the better countries in recovery from the economic crisis of the last four years; however, temporary agency labour is a hotly contested topic in the country and has been the cause of a number of recent political clashes.

Despite record unemployment levels in the Eurozone, the jobless rate in Germany is remaining stable. In fact, in the final quarter of 2011 the employment rate was at a 20-year high. In February this year there were just 750,000 temps in the country; despite this the CEO of Adecco has claimed that temporary agency workers in the country could double by 2020.

Problems for the contingent market in Germany are ever-present and range from issues at ground level, right up to confliction politically…

Employment agencies and unions sat down in February this year to debate wages in the electrical and metal sector. Although the country has introduced a minimum wage for temporary agency workers, many believe they are still grossly underpaid. The debate failed to reach a conclusion and has since happened again, still resulting in no agreement.

The introduction of that minimum wage for temps is said to have increased illegal employment levels, according to the Institute for Applied Economic Research (IAW). They claim the rule has increased the percentage of illegal employment as “it makes regular employment more expensive.”

Onlookers have regularly criticised the market over the last six months: In March the German Labour Minister Ursula von der Leyen strongly criticised malpractices in the temporary staffing industry. She said that temporary work “creates flexibility in the short term… but it should not lower wages in the long term.” In the same month the opposition party branded temporary workers as “2nd class employees”.

It’s a difficult time for temporary agency workers in Germany and no doubt today’s news of strong GDP figures in the country will promote yet more growth and jobs. Whether they will be temporary positions is yet to be seen.

You may also be interested in our blog “What can the UK learn from the German temp shortage?”

Europe week: France and temporary agency workers

The use of temporary agency workers in France has declined every month this year, following a 3.7% slump in Q4 and overall employment in France close to a record 10%. As the third largest employer of temporary agency workers in the EU, behind the UK and Germany, this is a worrying trend. Over the next year we’ll start to see the impact of the recent elections and the first shift to the left in 20 years.

Business leaders are likely to remain cautious during a period of political transition, so the figures may take some time to increase again; although a recent survey has found that French employers are planning to increase recruitment in 2012. The latest Labour Requirements Survey forecasts a 4.3% rise in employment over the coming months.

Recent proposals could make temporary agency workers more appealing to employers. Temps in some areas of the county are now eligible for a new coaching scheme managed by the public employment services, Pôle emploi. Initially launched last year, the scheme was aimed at those finishing a fixed term contract. Now, the scheme has been rolled out across 28 areas and will be offered to any temps whose assignments end.

In contrast, a case to likely to make temporary agency workers less appealing – A temp went on hunger strike outside a staffing firm earlier this year, in protest at the compensation he received for an accident 11 years ago. The man was working on a construction site when he fell 10, suffering head trauma and injuries to his wrist which has made it difficult to find work since. Despite receiving €17,500 compensation he claims he should have received more and the staffing firm which had hired him should have provided health and safety material, such as a helmet.

Similarly to the UK, and indeed the rest of Europe, France is seeing a difficult transition out of economic difficulties The implementation of EU rules such as the Agency Workers Directives has put some employers off hiring temps, however it is still clear that a contingent workforce is a necessity.

Public sector temp usage falls sharply

Temporary employment in the public sector dropped significantly in the first quarter of the year.

Overall employment decreased by over 15%, but some areas of the UK have taken much bigger hits when compared to the same period last year. The North East saw the biggest drop at -127.3%, followed closely by the West Midlands at -115.9%, London saw a drop of over 25% in the use of temporary staff.

The figures from Comensura also showed a pay increase for temps, averaging at 8.9% across the board – this is likely due to the Agency Workers Regulations.

Young people have been the worst affected by the reduction in appointments as the number of 25-34 year-olds employed on a temporary basis dropped by -35.4% year on year.

Temporary agency labour usage dropped in driving and transportation roles by 39%, as well as IT roles and engineering/technical positions. Conversely, the construction industry saw a 20% increase in temporary staff usage.

Both men and women were affected by the reduction in temporary labour, although women did fare slightly better and now account for 45.3% of all public sector temporary labour. This was due to a lower than expected decline in the number of office/admin workers, a job category that accounts for almost 20% of all temporary workers and where women represent 70% of all temporary labour.

The temporary recruitment market remains resilient

Two reports released today reveal just how well the contingent workforce market is coping with the negative economic climate and the Agency Workers Regulations (AWR).

According to the REC the market is holding up well, despite recruiters reporting increasing costs due to the AWR. Their figures showed a slight ‘blip’ in figures in January, partly attributed to a rise in permanent hires. Speaking to HR magazine, Tom Hadley, director of policy and professional services at the REC explained:

“If you look at other EU markets that implemented the regulations before the UK, they experienced blips too, but ultimately had stronger temp markets than before the regulations came in.”

A separate report from Venn Group shows that the usage of temporary agency workers has increased by a third in the first quarter of 2012. They found that the industry has ‘experienced an upswing’ in the commerce industries, financial services and, perhaps surprisingly, the public sector.

The study found that the North of the country is seeing the largest rise in demand. The North West increased usage by 61%, the Midlands by 59% and the North East by 48%.

London’s increase was 36%, unsurprisingly attributed to the Olympics.

Positive signs for the jobs market

Unemployment has fallen for the first time on almost a year according to the latest figures from the Office for National Statistic (ONS).

The total dropped by 35,000 from December to February, meaning the total number of unemployed now stands at 2.65million.

Whilst the fall is a great sign, the figures are still significantly higher than they were this time last year – 170,000 higher in fact. Nick Palmer from the ONS explains:

“If you look at the longer-term picture, unemployment rose quite strongly during the summer of last year, then the increases tailed off a bit towards the end of the year. So despite this latest decrease, the level of unemployment is significantly higher than it was a year ago…”

Breaking down the figures women have been badly affected in the last, although youth unemployment appears to be taking a change in direction. The number of women without work rose by 8,000 to 1.25million – the highest figure for nearly 25years. News for younger jobseekers is more positive as those unemployed fell to 1.03million, although the rate of unemployment in 16-24 year olds stands at 22%.

More EU regulation for temporary agency workers?

The EU Commission has said it wants to increase protection for temporary workers who are briefly posted abroad, putting yet more regulations in place in the contingent workforce arena.

The commission believes working conditions for temporary agency workers sent abroad often do not meet minimum standards and that posting workers in other countries is being used as a way to evade minimum social standards.

The Commission said that the plans are designed to eradicate the abuse and exploitation of employment rules and that there should be stricter controls in place for employment agencies to avert social dumping.

Employment, Social Affairs and Inclusion Commissioner, László Andor, said the proposals would clarify the rules on posted workers, and put practical safeguards in place against social dumping.

Over one million temporary workers are sent abroad each year with Germany, France and Belgium being the top destinations. It’s estimated that a quarter of these workers are in the construction industry, which raises question as to how further EU legislation could impact on the industries slow recovery.

Source: Staffing Industry Analysts

Temporary work bucking national employment trends.

The use of temporary agency labour has increased again in most sectors, in antithesis to the latest government figures regarding temporary employment.

The manufacturing sector has seen it’s second increase in the use of temps this year, suggesting the industry could be returning to growth in the first quarter of 2012. Date from de Poel shows that the number of hours worked by temporary staff has increased year-on-year by 35% in January and 48% in February as the manufacturing sector has increased its labour needs to support improved levels of output. Reports out by the Purchasing Managers’ Index (PMI) showed levels of activity in manufacturing were at its highest for eight months in January 2012 thanks to a rise in new orders and an increase in production.

The data also showed usage of temporary labour rose by 79% within the Business Services sector, 30% within Care and 4% in Construction. Facilities Management and Logistics sectors reduced their use of temporary labour during February 2012 by 33% and 27% respectively.

In complete contrast the Office of National Statistics figures release today (14/03) show unemployment at a near 17-year high, with 2.67 million people now out of work.  Despite the increase, many commentators have suggested the figures aren’t too bad:

In an interview with the Financial Times,Howard Archer, an economist at HIS Global Insight, said the data were “mixed overall but the rise in unemployment does appear to have moderated recently which supports hopes that the economy is returning to modest growth”.

For a complete overview of the latest employment statistics for both the permanent and temporary arenas take a look at our Employment Snapshot.

International Women’s day and female temporary agency workers

Observed since the early 1900’s, International Women’s Day is honoured across the world. However, it was originally called International Working Women’s Day. So, we thought we’d explore women in the temporary agency workers landscape.

According to Equality Law the ratio of male to female workers in the UK declined last year.  From evens at the beginning of 2010 the proportion was 55.5% male to 44.5% females by the end of 2011 – in fact a recent report by Leadership consultancy White Water Group has suggested that quotas may be the only way to remedy the situation, according to the heads of female business networks at top UK companies.

Whilst the drop isn’t significant it supports the notion that the economic downturn and slow recovery is affecting women and the young most severely. The most recent ONS figures showed that the number of unemployed women also hit its highest level since 1987, many now reliant on part-time work.

Typically temporary agency workers were drivers and warehouse staff, used by companies to respond to fluctuations in demand for goods. However, many businesses are now seeing the benefits of using a temporary workforce to fill professional roles, where skills may be in short supply or to cover sick or parental leave. According to Kevin Green, Chief Executive of the REC:

“We are seeing high demand in professional roles such as IT, engineering, legal and HR and chefs continue to be in demand within the hospitality sector. The other sector which seems buoyant is nursing, medical and care. We believe this is because NHS trusts are recognising that using high quality temporary staff when they are needed is a cost effective solution to maintaining a quality service when budgets are being squeezed.”

This means women’s roles in the temporary agency workplace are becoming more prevalent, giving professional women the option not to seek benefits should they be made redundant; but to continue working flexibly. The benefits for employers are wide ranging, women and men have different ways of problem solving and managing situations, women are likely to stay in a role, even if it isn’t definite, due to family commitments and according to the UN “employing more women is good for business”.

AWR isn’t affecting temporary agency worker recruitment

The impact of the Agency Workers Regulations (AWR) hasn’t been as considerable as predicted. A number of reports released recently show that the use of temporary agency workers has actually been increasing since October.

The Recruitment and Employment Confederation (REC) latest report on jobs showed an improvement on temporary appointments in December. Our monthly figures also show a marked increase in the use of a flexible workforce. e-tips ® data shows the use of temporary staff in the UK rose by 13% in January compared to the same period last year.

The Agency Workers Regulations is certainly not yet affecting the temporary jobs market, or putting employers off using them. One thing working in the AWR’s favour is the forecasts of more economic woes – businesses would much rather spend a little more on their temps under the AWR than risk taking on a permanent workforce in an uncertain market.

Last week the Office of National Statistics released its figures that showed unemployment is continuing to climb.