Agency Worker Regulations could boost IT outsourcing

In October new rules are coming in that will give temporary staff, employed through agencies, the same pay rights as permanent staff after only 12 weeks with an employer.

Agency Workers Regulations 2010 (AWR) will come into force on 01 October. It gives rights to workers that are supplied by an agency but directed by the business where they work. As a result workers at an outsourcing service provider who work at customer sites will not be included because they are directed by the service provider and not the company where they are actually working.

You can read more about it here.

This might create a bit of a headache for businesses that will be obliged, on request, to show how much permanent staff are earning. Lawyer Yvonne Gallagher, who is head of employment at Lawrence Graham says that businesses that do not want to go through the red tape might outsource, rather than hire through agencies, to overcome it.

“At the moment organisations that use agency staff can effectively wash their hands of any management responsibilities for the staff. The agency deals with them.

“But as a result of these changes the companies that use agency workers will face requests from individuals and agencies about pay and benefits.

“Those that use a large amount of agency workers might find that outsourcing rather than using agency staff gets rid of this problem.”

David Bloxham director of recruitment agency GCS says the AWR law brings the UK closer to the rest of Europe in terms of using agency contractors.

He says that service providers in particular areas might benefit as employers attempt to get around the law.

He says because the law expects agency workers to get the same pay as permanents it will not affect many IT contracts because they often get higher pay than permanent staff. “It is the contractor’s decision whether target involved in AWR.”

As a result Bloxham does not believe IT contractors working on things like large SAP projects will be affected. But he says lower level IT such as help desk, service desk and some testing could see businesses outsource to avoid the extra work involved in AWR.