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British businesses have become ‘agency worker-reliant’

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While the majority use agency workers for short-term gaps, a significant minority of employers view them as core to their business model, research has found

In a survey commissioned by the Resolution Foundation, 500 HR decision-makers at private sector firms already using agency workers were polled to explore what has driven an increase of more than 40% in the agency workforce over the past 10 years.

The report revealed that most companies using agency workers do so for traditional reasons such as filling gaps in staffing (46%), or as a last resort (19%). This aligns with businesses saying that covering holidays and absences is a key reason for using agency workers, which was cited by 43% of firms.

However, a significant number (34%) appear to be using agency workers more strategically to fill as many posts as possible or for particular parts of their workforce.

Organisations that were agency worker-reliant were also found to be much more likely to believe agency workers are cheaper than directly employed staff (39% compared to 26% of firms that hired less than 5% of their workforce via agencies).

Lindsay Judge, a senior research and policy analyst at the Resolution Foundation, said: “Demand for agency workers grew significantly over the last five years – particularly among firms who use them as a core part of their business model and have become agency worker-reliant. But with the latest data suggesting the growth in agency workers has tailed off, such businesses may find that they have to rethink their plans.”

There are now more than 800,000 agency workers across the UK. A quarter (25%) of respondents indicated that they plan to increase their use of agency workers over the next five years, and more than 55% expect to maintain current levels.

The report called for the government to pay more attention to this part of the workforce, and for firms to reconsider their approach in a tight labour market with lower migration.

“Our survey of firms busts a number of myths," Judge added. "Agency workers are still used largely as a stop-gap measure. But for a significant minority of firms costs, convenience and control all play an important part in explaining their reliance on agency workers.

“With demand for staff high, now is the time for the government to follow through on its response to the Taylor Review and end the abuse of agency workers’ rights,” she urged.