The Confederation of British Industry (CBI) has set out its analysis of the impact of the Agency Workers Regulations (AWRs) and issued its priorities for the upcoming Government review of the Regulations a year after they came into force.

Research by the CBI has shown that 57% of firms that use temps have reduced their use as a result of the Regulations. Three per cent have increased their use, while 8% have stopped using temps all together.

TEAM research found that 38% of agencies reported a decline in assignments as a result of the Regulations, whereas 18% reported an increase. The same survey found that 62% of agencies reported a negative experience of the regulations.

CBI Director of Employment and Skills, Neil Carberry, said:

“Agency jobs are a crucial way into employment both for people looking for flexible work, and for those seeking experience and a way into the workforce.

“But one year on from the introduction of the Regulations, the business verdict is that they are a drag on job creation in this vital sector.

“The Regulations are thought to have cost businesses more than £1.5bn in their first year, but temps have not reaped the rewards – instead, the vast majority of this cost has paid for paper-pushing to ensure compliance. This has in turn led to a reduction in temps hired in eight out of nine months in 2012, despite a rise in permanent staff being hired. We cannot afford to be complacent, given that we would expect increased demand for agency temps in uncertain economic times, not a drop.”

In preparation for the review, the CBI has identified several key areas where it believes the Government should focus its efforts to simplify the Regulation.

Streamlining the highly complex definition of pay to allow for easier comparison, as well as simplifying the 12-week qualification period so that those on short-term assignments are not needlessly caught up in the Regulations are two of the suggestions made by the CBI.

Neil Carberry added:

“The Government must not shy away from a review of all aspects of the regulations that are left to the UK to decide. Given the very significant costs of complying with the EU directive, we should be bold in stripping out needless administration that threatens hiring and does nothing to benefit temporary workers.”

Business Secretary, Vince Cable has promised to review the paperwork next year with a focus on simplifying it.