Here to stay! Agency workers’ role in labour markets to grow, suggests survey

Demand for agency workers is set to grow as staff seek greater flexibility and employers back the fresh thinking and specialised skills that temps offer. As we head into an election, policymakers need to work with this trend to grow their economies, says the REC. 

Global body the World Employment Confederation (WEC), of which the REC is a member, commissioned a global survey of senior executives from Forbes 2000 companies. It finds that the majority of respondents already have at least a fifth of their workforce as flexible employees – and yet 88% said increasing employment of agency workers is important to them in the next two years. Eight in 10 of the UK respondents said they will increase their use of agency workers in the next two years. 

The WEC survey also reinforces the trend for people wanting to work flexibly. To meet this trend, almost every company is trying to create a more flexible talent model, finds the WEC survey. In fact, the WEC survey shows that 92% of leaders say they will need a more flexible workforce in the next two years.

REC Chief Executive Neil Carberry said:

“As the General Election campaign gathers pace, politicians and policymakers need to show they get that how people work has changed – driven by employee needs as well as what employers want. A flexible approach to our labour market has driven high employment rates and economic growth – but it also reflects the different needs of workers.

“This survey is a reminder to policymakers of the many ways of working and how much of a catalyst flexible work is in helping workers with caring responsibilities, those with long-term health conditions, and those coming from unemployment to access the labour market. The next government should start by building greater understanding of what workers need now, and how flexibility and better regulation can help. From skills to transport and childcare, people will be at the heart of any industrial strategy – but success starts with giving workers and companies the flexibility that this survey shows they want.”

Looking at the WEC data, the most popular reasons given by respondents globally for using agency workers include to ‘increase the agility of our workforce’, to ‘bridge unexpected resourcing gaps’, to bring in ‘specific digital skills that they struggle to find permanent hires for’ and to ‘access a higher calibre of talent than is possible through permanent hires’ as demand dictates.

These are similar to the reasons that the UK respondents gave in the same WEC survey. These include 84% of UK respondents agreeing that hiring agency workers with existing knowledge of technology is an effective way to spread understanding to permanent employees. And 88% of UK respondents agree that agency workers bring valuable new perspectives to existing employees which helps drive innovation. Other popular motives include increasing resources in a planned way at specific times of year and covering staffing demands during a recruitment freeze.

Sections of the workforce will welcome the findings of the WEC survey because flexible work was the new normal even before the pandemic. This is driven by people’s choice on work-life balance, the ability to top up incomes and its attractiveness for those who wish to follow less linear career paths. It regularly helps new entrants, career returners and those with caring responsibilities stay or rejoin the labour market.

Globally, the proportion who say they can access a higher calibre of talent through agency workers is highest in oil and gas, automotive and transportation, consumer products and retail. And crucially given the global drive to achieve net zero, 79% agreed that agency workers can spread tech and green skills.

The WEC survey results may suggest that the contribution of the recruitment and staffing sector to the UK economy is likely to grow, with it already contributing Gross Value Added (GVA) of £41.3bn in 2022, which itself was up by 13.7% on 2021 in nominal terms, according to REC’s latest Recruitment Industry Status Report.

A closer look at the findings from UK respondents to the WEC survey shows:

• More than 80% use flexible employees (including agency workers, contractors, self-employed workers, workers on call).
• 96% of respondents think it important to offer more temporary contracts and 91% think it is important to increase employment of agency workers.
• 88% said agency workers bring valuable new perspectives to my organisation which help drive innovation.
• 98% said there is a need to build awareness of all the contract types available to workers today and promote free choice for everyone to choose what suits them best.
• 86% said their organisation has started working in a more strategic way with HR services providers in order or address talent needs more effectively.

Neil Carberry added:

“Good recruitment agencies have rethought how they find and retain talent because workers now value flexibility as well as pay. In this way, recruiters are playing a crucial role in helping businesses and industry meet their fluctuating demands and providing work-seekers with flexible assignments to meet their needs. Businesses can help by working in partnership with recruiters to improve their understanding around recruitment and retention strategies in what is still a tight labour market.”

Ends

Notes to editors:

The World Employment Confederation (WEC) commissioned FT Longitude to survey 715 senior executives from around the world, including 680 from Forbes Global 2000 companies and 35 from public sector organisations. The project also included interviews with senior business leaders and global experts in talent planning and the future of work. REC is the UK federation member of WEC.

To see the WEC and related UK data, visit the REC website.

Recruiters filled 25 million temp and contract roles in a year, according to the latest REC industry report, December 2023. The RISR report is the REC’s annual survey, drawing on data for the financial year after firms have closed their books on the year. This year’s RISR demonstrates the key role recruitment and staffing firms played in driving the post-pandemic recovery for firms and workers. Temporary, contract and permanent placements were all up on 2021. 25.7 million temporary and contract placements were made in 2022 (compared to 22.4 million in 2021) and separately 702,950 permanent placements made in 2022 (a significant rise on 540,000 in 2021, as the permanent market took off more slowly after the pandemic).

Click here to view all REC press releases and for more information and interview enquiries, contact the REC Press Office on 020 7009 2157, 020 7009 2129 or pressoffice@rec.uk.com. Outside of regular office hours, please call 07702 568 829.

The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

Find out more about the Recruitment & Employment Confederation at www.rec.uk.com