Managers are confident about growth despite economic uncertainty
It seems fears surrounding the news of a double-dip recession were short-lived, as a multitude of surveys reveal strong business and growth confidence.
60% of bosses are confident that their business will grow its output next year and almost a fifth expect it to grown significantly – according to research by the Institute of Leadership and Management (ILM).
The survey of 1000 managers showed that 85% felt growth was a priority for their company and 8 out of 10 said they were confident about their ability to lead growth.
Supporting the survey, the UK business Confidence Monitor (BCM) found that confidence, surprising, improved in the three months to May, despite uninspiring employment and GDP figures.
The BCM index (from chartered accountants ICAEW and consultants Grant Thornton) was 12 at the beginning of the month, up from -9.3 in the last quarter and the highest level since the second quarter of 2011. The organisation believes that the increase implies economic growth of 0.6% in the second quarter of the year.
“Turnover and profits are all increasing but nowhere near the rate seen pre-recession and businesses are beginning to realise that this environment may be the norm for some time,” said Grant Thornton chief executive Scott Barnes.
The news is great for the temporary agency labour market, which has seen some recent fluctuations too. As companies continue to increase production and activity, temporary agency staff are employed as a prudent way to increase workforce levels whilst remaining flexible.
Olympic boost for temp positions
With the London 2012 Olympics now just two months away, there are expectations of a huge rise in the use of temporary agency workers. Whilst they are commonplace in businesses that naturally have peak periods, such as retail and tourism, the games will mean companies unused to contingent workforces will be reliant on them to meet demand.
Businesses planning to use temporary agency workers to cope with a rise in demand during the Olympics must make sure they fully understand the Agency Workers Regulations.
The duration of the games means many workers will only be employed for a few weeks, much less than the 12-week qualifying period. But, the regulations have an impact before the qualifying period expires. Whilst many larger employers who use temporary agency workers year-round will already have the processes in place to deal with the regulations, those anticipating a high demand purely during the Olympics may fall foul.
Under the regulations there are ‘Day One Rights’, which, unsurprisingly, a temporary agency worker is entitled to from their very first day. These include access to shared facilities and amenities or services, such as crèches, canteens and transport services, and information on job vacancies.
For further information on the rules, please see our Agency Workers Regulations website.
Underemployment and its impact on workforce politics
Underemployed (adjective) 1.employed at a job that does not fully use one’s skills or abilities.
2. employed only part-time when one is available for full-time work.
3. not utilized fully.
The unemployment rate dropped in the last three months, but figures show that the rise in part-time and temporaryworkers has been significant. There are now 1.4million people ‘underemployed’ in the UK; that is that they are working, but not in a role which is insufficient in some way to the workers, for example pay, hours or skill-level.
Whilst some work is obviously better than no work, the strain underemployment puts on workers and their families is pronounced. The phenomenon is gripping across the market too – whereas many would expect women to be part-time workers, the latest figures show that 645,000 men are now working part-time. Many people are finding the need to work multiple jobs to make ends meet, not only is this a risk to their health, but it’s also a concern to employers as productivity levels are likely to drop.
The impact on workforce moral and politics is, unfortunately, a hugely detrimental one. Although employees are choosing to work on a part-time or temporary basis over relying on Job Seekers Allowance, there is still likely to be a level of resent, especially toward those who are employed on a full-time basis or in desirable positions. HR Managers have an increasingly difficult job to maintain moral in an underemployed workforce, at the same time recognising underemployed talent that could benefit the business if better utilised.
According to the TUC, involuntary part-time work has risen quicker than unemployment since the start of the recession. During this period, the number of men in this position has risen by more than 115%. And nearly a third of young people in work are having to do part-time hours, even though they want a full-time job.
Temps could ease aerospace supply chain pressures
An increase in demand for aircraft has seen some of the world’s biggest names in aviation plan a significant increase in output. Whilst this is great news for the wider economy, the added pressure on the supply chain may cause problems.
With a notoriously complex supply chain, the aerospace sector is vulnerable to varying demand. The smaller firms, lowest in the chain, are arguably the most integral and many will be both elated and concerned about the news. A report by PwC aerospace and defence, Mission Control: 2011 annual and fourth-quarter review, supported these supply chain fears.
“The need to rapidly expand production in a number of aerospace platforms is putting strains on the supply chain. Our analysis indicates that a significant proportion of suppliers are at risk of not being able to deliver the ramp-up that is required.”
Unfortunately the problem is underpinned by an industry skills shortage. The sharp increase in demand has left many positions unfilled and the recruitment process requires a significant amount of time and cost. However, with the military and defence sector heading in the opposite direction to the commercial industry there is a pool of workers with transferable skills and experience becoming available. By employing these workers on a temporary basis suppliers are able, at least to attempt, to keep up with the demands of the sector.
Taking on temporary agency workforce with the goal to invest and train them to have the required skills is also a workable option. The flexibly allows employers to ‘try-before-they-buy’, reducing wasted investment.
Whilst a larger workforce will not alleviate all the pressures of increased demand, it will give suppliers the tools to give it their best shot.
Europe week: Poland and temporary agency workers
Since joining the European Union, Poland’s employment market and its workers have been in the spotlight regularly – although mainly due to Poles moving out of the county to find work.
Poland’s current levels of unemployment is at a five-year high, at 13% and the Eurozone crisis has led to a slow-down in growth – despite strong export demands from neighbouring Germany.
According to a recent report in The Economist: “More reform would help. The labour-participation rate is low. Big firms suffer a workplace curse: it is normal to call in sick on Monday and come back on Friday because of a slight cold. Fraudulent incapacity claims are endemic. Doctors are complicit. Small businesses waste thousands of hours completing forms, visiting state offices and paying expensive lawyers and accountants.”
A survey at the start of 2012 revealed that 70% of companies in Poland are planning to increase their headcount over the next year. Encouragingly many said they would be looking to employ temporary agency workers, contractors and the self -employed, rather than permanent staff. This gives Polish businesses much greater flexibility to deal with peaks and troughs in the European economy.
However, it’s a different story for those looking for agency work outside the country. Last month a Dutch news agency, NOS, claimed that Polish temporary agency workers lured to the Netherlands often work much less than their recruitment firms promise. According to the report they are known as ‘stand-by Polish’ as they are drawn into the country on assurance of regular work but are often only employed for a few hours a week.
Although strong, the temporary workforce market in the country is not without controversy; in January strikes took place over alleged ‘shady practices’ by a pharmaceutical company. Workers were angry that they are hired on fixed, long-term contracts instead of permanently so that the company could avoid the associated benefits.
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.
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Unite cracks down on employers using agency workers
Unite has voiced concerns over the “widespread use of agency labour” in the mechanical and electrical sectors.
Unites agreement states that employers should make every effort to offer directly employed work, however there are increasing levels of temporary agency workers in the sector.
This is not unique to these sectors, and whilst some employers may use so-called ‘casual’ workers to flout laws and avoid higher pay-rates, the majority use temporary agency workers due to their flexibility and skills. Whilst Unite doesn’t want to remove all temps from the industry, caution should be taken, especially whilst the economy is still so volatile.
May 25, 2012 Posted by depoel | de Poel Comment, Latest News | casual workers, managing temporary agency labour, temporary agency workers, Unite | Leave a comment