Temp to Perm: Emerging Trends in the Gig Economy

Temporary workers are a vital source of new recruits for many UK businesses. But more must be done to protect the legal status of Britain’s short term contractors – that was the message delivered to a cross-party committee on employment and industry last week.

The Business, Energy and Industrial Strategy select committee, which met last Tuesday (28 March) , took evidence from a panel of industry experts, recruitment professionals, and workers’ representatives. Discussions focused on the current make-up of the UK workforce and how a reliance on unsecured contracts may change both recruitment practices and the way existing employment laws are implemented in future.

Among the key areas of discussion were the growing number of employees within the temporary workforce, and the use of agency staff; the effects of new and disruptive technology in the recruitment sector; and why a shortage of skills in manufacturing is creating a growing demand for highly paid, expert temps.

Chairman Iain Wright opened the talks by voicing concerns over the perception of agency practices in today’s employment market. “Downward pressure on terms and conditions, virtual exploitation of the workforce: that’s where agency work tends to be.”

Steve Turner of Unite The Union then told the committee that the current scale of the UK temporary workforce has been significantly underestimated in official data. Mr Turner said research carried out by Unite had identified “1.6 million agency workers; not the 900,000 that you see in the formal statistics.”

But Lindsay Judge of the Resolution Foundation struck a more optimistic tone, identifying four areas within the British economy where agency staff could be found at all levels of organisations. “There were four sectors that stood out and they were: manufacturing, transportation and warehousing; business activities (including consultancy, IT, and CRM); and the public sector. What’s interesting is they’re not all low end.”

Expert Temps and the Skills Gap
The committee’s findings draw attention to the growing prominence of expert temps: workers on higher salaries but short term contracts. One week ago we considered Australia’s growing reliance on temporary staff within the workforce. Today, a similar narrative emerges in the UK, and it could shape recruitment practices for future generations.

There was a general consensus among the panel that recruiters and temporary workers’ agencies (TWA) were meeting the challenges of the new employment market. David Camp, the chief executive of the Association of Labour Providers reported that many businesses see TWAs as the best way to meet labour needs. “Agencies are labour sourcing experts, they enable flexibility. ‘Temp to Perm’ is the most common way to recruit your workforce these days.”

Adding value to recruitment
Tim Thomas of EEF echoed this sentiment, saying that in many specialist industries – such as automotive and aerospace – TWAs were indispensable when searching for specific skills within a competitive environment: “They are a source of recruitment. You may take an agency worker on, and then later on they would become a permanent employee. Agencies provide access to those vital skills.”

Mr Thomas denied Mr Wright’s earlier claims that agencies were responsible for applying downward pressure on wages. “In our industry, it is often the workers who have the better bargaining position, because of our skills shortage.”

“We use agencies because we need the people. There is no financial incentive; it actually costs more. The cost is increasing, not decreasing.”

At eBoss, we emphasise the need for recruiters to bring value to the hiring process. Today’s industry leaders focus on delivering a premium service, and not a one-size-fits-all solution. With semantic search facilities and advanced recruitment software, leading agencies can track highly skilled individuals across their professional careers, and connect skills with industries in an open and fluid manner.

The committee concluded that employment will become a less rigid process, and that agencies must adapt to maintain their current role. “The world of modern work is transforming itself rapidly, and we need to keep ourselves abreast of it.”