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In the words of Ian Dury “What a Waste”

If you saw a £5 note on the pavement you’d probably pick it up. It would seem a waste not to. However, according to a report recently produced by O2, digital skills worth £6.7 billion are being wasted. What’s more – they are here, available now and we’re already paying for them. They’re in the hands of Britain’s unemployed youth (actually about 37% of them). You’d have to walk past that £5 note 1.34 billion times to equal the amount of money UK industry doesn’t, it seems, plan to pick up.

It’s a terrible waste and it also begs an awful lot of questions.

Is youth unemployment so low that we don’t need to worry about it?

No. Unemployment in the 16 to 24 age group stands at approximately 1.02 million.

Does British industry need digital skills?

Emphatically Yes!

Look at the number of seminars showing business how to use social media. Look at the success of Apple. The internet is worth over £100 billion a year to the UK and is 7.2% of our GDP.

Are UK businesses geared up to make use of these resources?

Sadly, No.

According to the report “77 per cent of businesses acknowledge that young people have digital skills in abundance but less than one quarter (24 per cent) are planning to offer a first time job or an ‘on the job’ training role to a young person in the coming months.”

What are the answers?

On the face of it there is a match. A large pool of potentially low-cost skilled “workers” on the one hand, and a need for those workers’ skills on the other. However, it seems there is no great clamour from employers.

Any solution would need to

  • Identify the talent pool and recognise/classify their skills
  • Provide a mechanism to make them available to employers/business e.g. co-operatives
  • Educate employers on the benefits of using digital resources to improve their businesses
  • Encourage “digital companies” like Virgin Media, Sky and BT to provide a platform for digital entrepreneurs to exploit these unused skills.

There is no single answer but walking past £5 and not picking up is a waste. Walking past £6.7 billion is a scandal.

Want to watch Usain Bolt or get on with your work ?

This is an extract from Eversheds/BBA Employment Law Update eBook 2012

How quickly the period of run up to the Olympics 2012 seems to have passed. Anticipation has been steadily mounting since the turn of the year but so too has employer concern regarding the maintenance of business operations during the Games and issues such as staff absence, both authorised and unauthorised.

In this last of series of Eversheds’ briefings, we consider the issue of staff following Olympic events during working hours, with or without employer consent.

The Olympic Games: a major distraction in the workplace?

The Games will commence on Friday 27 July 2012 and will close on 12 August, shortly followed by the Paralympic Games from 29 August to 9 September 2012.

Whilst some events, such as the Opening Ceremony, will take place in the evenings, many, including those in which Team GB has medal hopes, will arise during normal working hours. Inevitably, not all employees will be able to take time off work to watch events live or will necessarily have thought to request leave in advance. However, the draw of watching a national team’s success or failure in certain events may prove too strong for many workers and encourage illicit internet or television viewing or accessing of mobile phone updates or radio broadcasts during work time.

Over 75% of UK workers use PCs at work. Many more have mobile phones or devices with media access. Policy approach by employers, in terms of permitting personal use of such equipment in the workplace, varies from complete prohibition to extremely liberal.  Allowing access may not of course be possible in all working environments. Even so, the temptation for staff to monitor progress of the Games or to watch certain events will be more intense than usual this summer. How should employers respond?

Some issues to consider

  • Decide what will be acceptable: A policy regarding internet use/ access to mobile phones at work may already be in place and provide a suitable framework for what is deemed acceptable in the workplace. Blocking internet access is an option but not a complete solution if employees have access to personal mobile phones. Consider whether you will prohibit personal use of a work PC or access to personal devices during working hours? Or might it be possible to allow limited use around the needs of the business, such as at break or lunch times. Any policy decisions in this regard will need to be communicated clearly to all workers and applied consistently.
  • Review current policy: Ensure that any pre-existing policy is appropriate for the approach you intend to take to computer/ internet use during the Games.  Does it require amendment, if only temporarily? If you have no policy, consider putting one in place. As a minimum a policy should
    • Set out a ‘code of conduct’ of what will and will not be acceptable. Manage employee expectations of privacy, highlighting any monitoring that might be undertaken;
    • Comply with any legal requirements, such as the Data Protection Act 1998 and the Regulation of Investigatory Powers Act 2000;
    • Explain implications of policy breach; and
    • Be clear and consistent with other policies, such as a disciplinary or harassment policy
  • Communicate expectations: With the prevalence of mobile phones and devices, media access has never been greater nor, in a work context, more difficult for employers to police. Restricting access to mobile phones can be particularly difficult to monitor. For employers to exercise any effective controls, it is vital that employees are aware of any internet/ mobile phone policy. Unless the working environment is one which requires high security or health and safety measures, allowing responsible personal access to the internet can have advantages in terms of engendering trust and confidence and good working relations. However, it is essential that this is accompanied by clear communication of any restrictions and intentions to monitor activity if employers are to avoid breaching various legal protections of employee communications. Make sure that your policy is clearly communicated to all staff in anticipation of the Games.
  • IT considerations: Bear in mind that deciding to allow a degree of internet access at work during the Olympics, possibly including the viewing of live events, could have potential network implications for some organisations, were too many employees to engage in this at the same time. As a precautionary measure it may be advisable to check your internet capability. Consider also any technical assistance you might require from an IT expert in terms of monitoring excessive internet use or abuse of mobile devices. Evidence gathering in this context is just as important as for any potential act of misconduct but not always as easily collated.
  • Disciplinary action: If limited access to the internet or mobile phones is to be permitted, employees must understand what the employer deems reasonable and what the implications of exceeding that level might be. How will you investigate potential abuse? What might the penalties be? Take care how evidence of abuse is gathered, particularly if it might involve accessing an employee’s PC, due to the legal restrictions on doing so. Potential disciplinary issues other than time wasting may also arise, such as employees engaging in online gambling whilst at work or accessing inappropriate internet sites which introduce viruses to the network. Consider also, wider implications such as the possibility that banter between staff around events might degenerate in to potential harassment. It may be appropriate to issue reminders that conduct such as online gambling is not permitted at work and that harassing colleagues who may be supporting different teams will similarly lead to disciplinary action.

Alternative options

Clearly, not everyone is able to access the internet at work. Those in open-plan environments, for example, may not have opportunity to do so or may fear distracting others. It is also unlikely that employers will be able to accommodate the suspension of work by all employees whilst they watch key events. In the interests of employee relations, employers may therefore wish to consider viable alternatives.

Some issues to consider

  • It is advisable for employers to know when the peaks in employee interest will arise. The Olympic timetable of events can be viewed here. Do you know what events your employees would not wish to miss above all others? If not, it may be worthwhile asking: the responses will not only identify opportunities for you to be a supportive employer but will help you to know when productivity is likely to be at its lowest and could ultimately help identify misconduct. Do any identified events fall during or close to break times so that slight adjustments to the working day might allow interested staff to watch? If only a few staff can leave their posts at any one time, could a system of preferences be applied, enabling all employees to watch at least a few requested events? Allocation would obviously need to be fair and seen to be so.
  • Will it be possible to set up some form of communal screen, thereby reducing disruption elsewhere in the business as well as internet traffic for individual PCs? If business needs will not allow for this, might key events be screened shortly after they have taken place, for example, at the end of a shift or during a scheduled break? This could generate a collegial atmosphere and boost staff morale. Make sure, however, that you have a TV licence allowing you to do this.
  • Some staff will simply want to know the results of events as they arise and will be prepared to view them later. To reduce the temptation of constant internet checking or e-mailing ‘on the job’, would it be possible to provide regular updates to staff, by e-mail, intranet site or merely a board in a communal area?

Comment

There is no doubt that a once-in-a-lifetime event, such as the Olympics coming to UK, is likely to prove disruptive to working life for a number of weeks. The unavoidable fact is that very many employees will follow the Games, will want to watch certain events live (if they can) or, at the very least, will spend time discussing events, competitors or merely the spectacle of it all, at work. Some will struggle to get in to work due to transport disruption. Others won’t try. Supplies or deliveries may also be delayed.

Whilst few employers will be immune from at least some of these effects, planning ahead by organising time off requests and ensuring appropriate policies are in place and communicated, should help enormously. See our earlier briefings and our checklist (above). Pulling together is also a concept with which the British are familiar, perpetuated in recent years by public reaction to events such as Royal Jubilees and Television charity programmes, where groups of workers have consistently demonstrated considerable team spirit and effort.  Employers who appear supportive of their staff and can tap into  the sense of national pride surrounding the Games may find, therefore, that longer term rewards in productivity and staff morale well outweigh the short term inconvenience and loss of working time.

Our thanks to Eversheds LLP for allowing us to publish this extract

Recruitment is easier with the Internet – honestly?!

Recently I was asked to talk to a group of long term unemployed people, offering them advice on how best to apply for jobs. We started talking about CVs when one woman said

I applied to ASDA and they rejected my CV in 3 seconds. They couldn’t have even read it!

It was her first brush with the world of automated screening – or having software (Applicant Tracking Systems) read your CV rather than a human being. Her response was one of surprise followed by something approaching righteous indignation. (“How can they do that?”) I went on to explain about keywords and the need to make your CV an exact match for the job advertisement. I found myself defending the need for automated applicant screening without really considering the arguments. However, there are arguments for and against. How can you (and why would you try to) automate a process requiring decisions throughout – where human intervention would seem not just desirable but absolutely essential.

The answer lies with the internet. “It’s made life easier for everyone” is an oft-repeated adage you hear trotted out – but unfortunately a bit too easy for those of us applying for jobs. Anyone can look at a job on a job board and say to themselves “I can do that” and within seconds their CV is on its way. It may identify them as a perfect fit for the role or as completely unsuitable, either way it’s not their problem anymore. However, it is someone’s problem – typically the employer’s. They have to handle the response. Currently we are in what academics call a ‘loose market’ (lots of applicants – very few vacancies), and this only exacerbates the problem as the number of applicants is large anyway without the added incentive of it being quick, convenient and free to add to it.

As an academic you might say that the most important part of any recruitment process is that it that it identifies the best person for the job. So you need to: devise a good detailed person spec (PS); attract enough candidates to give you a choice; go through each CV matching them with the PS; then invite a few for interview etc. This works well if you have say 50-100 CVs. It doesn’t work quite as well if you have thousands. If you work for M&S, Google, Adidas or some other famous high street name then you will have thousands. Imagine being in the HR Department and being asked “how soon can you shortlist the CVs for….?) What would you do? Read only the first 100? Read the first 200? Look for keywords in the first 10 lines? Involve everyone you can lay your hands on to help out? The more people you asked, the more queries you would have to answer. You might think to yourself ‘wouldn’t it be good if we could find a way of automating this, because there’s no way we can read 2,000 CVs properly’. Ah (you’re probably thinking) I bet that’s how they decided they needed Applicant Tracking Systems (ATS’s) in the first place – and you’d be right.

So is it the right thing to do?

If you’re a big employer in today’s economy I would think it’s a necessity.

Today’s systems are more sophisticated than their rather antiquated predecessors and can not only distinguish between repeating keywords endlessly and ‘real experience’ but they can incorporate more complex tests of suitability.

If you’re an SME, it’s probably a financial decision. How much does it cost to read, shortlist and file CVs? How much will it cost to buy an ATS? There’s no single answer for everyone.

However, there are 2 features of using ATS’s which are worth considering.

  1. If someone finds a way round your system – or to put it another way finds out how it works so well they can guarantee the success of their CV, is s/he bad because what they’re doing is underhanded or good because they’re resourceful?
  2. And I think this is more of a concern. If you get the original requirement wrong (and of course that never happens!) what do you do when the computer produces 20 excellent applicants and the line manager says “Umm…. they’re not quite what we’re looking for”. You can’t automate line managers so they get the requirement right. Nice thought though. There’s money to be made if you can do that.

People, Pipelines and Panic

Planned recruitment in the professional services sector

I know this is just common sense and therefore obvious – but it’s still worth saying.

When you recruit people it’s better to be prepared and have a group of people in mind who you think can do the job rather than starting out with a blank sheet of paper and a deadline.

Although you all know this, too often you probably choose the blank sheet of paper approach – and have the deadline imposed on you. Actually, that’s a little unfair you probably don’t choose it that way you just don’t do enough to stop it happening.

You should have a plan – and what better way to plan than to make a list. In fact, several lists. Here’s our first.

Recruiting people is an uncertain task.

1          You don’t know where to find the best candidates,

2          You don’t know whether you’ll like them when you meet them

3          You don’t know whether they‘ll want you even if you want them

However here are 3 things you can do to make the whole process a little less uncertain.

1          You can be clear about what you want and hence who you want

2          You can keep clear records of CVs/resumes received so that you can look at them in the future

3          You can meet people you think you might like and keep in contact with them so that you know where they are working and what they are doing

To put it another way you can act like a salesman or recruitment agent and keep a pipeline of people so that when an opportunity arises you can contact them straightaway knowing that they will be a good fit for your role.

There are of course a couple of issues with this approach – it’s not guaranteed to succeed.

Firstly there is the process by which you create and maintain the pipeline and secondly there is the problem with availability when you need to use it. The first thing to realise is that “the process” isn’t a single process. Here are 4 different channels for building up your pipeline and each one is a process.

1          Clients. When you work on a client’s site you can interest their staff in your company. N.B. You should avoid approaching them directly as you risk souring relations. Ask about their career path and talk about yours. You can talk positively about your company and the message will get through without it seeming like obvious selling. Make sure you exchange business cards and contact them regularly by email and with the occasional call. You will have the pretext of showing continued interest in the client. Even if they show no interest in joining you they may move elsewhere and remain as a client.

2         Interviews. When you interview candidates who are unsuccessful for one role (typically because they were either second best or the filling of the vacancy was contingent on winning a project) keep their CV and ensure that you have a system that enables you to retrieve their details when you need them. It’s a similar model to the one you use with a client – keep in touch and be positive about them and your company. The same is also true of their potential as a future client.

3         Linkedin. This is the greatest recruitment tool out there in my opinion. I’m not referring particularly to advertising on Linkedin but its role as a network enabler. You can search on keywords, contact the person, and see their CV at a glance. What more do you need? Pay out more for a premium account then you can contact more people. Agents do this so you should be doing it as well.

4         Your own consultants. People mix with other people who do similar jobs and they talk about their work. If you incentivize your people sufficiently they will recruit for you and almost certainly still be less expensive than an agent. They may also feel more loyalty to you because they have “sold the company” to a friend.

Availability – you need a supply of people in your pipeline who far exceed your estimated requirements. The best way to avoid last minute decisions is to recruit to meet your strategy and do your best not to deviate from it. If you need to accept an opportunity even if it doesn’t fit with your strategy you should of course recruit people just before the work appears – good luck with that. If this happens repeatedly your strategy is probably at fault.

Here’s another list. A list of benefits of using your own pipeline.

1          It saves money. If you have to go to an agency particularly if you are in a hurry you should expect to join in at the top of the market and why wouldn’t you? Agencies are in business to make money and if you need someone in a hurry they will spot the opportunity to make some out of you. It’s perfectly reasonable for them to do that – it’s business.

2          You can grow the business organically at your own pace by strategic recruitment rather than having to react because of a pressing opportunity. This isn’t 100% true in 100% of cases but it is mostly true in most cases.

3          You should need to use contractors less frequently. Typically you will take on contractors when you have an opportunity and haven’t got the skills to fulfil it. If you use your pipeline strategically to spread your (potential) skill base it should reduce that need.

To summarise we have 3 points to remember. It’s our final list.

1          People – work out who you want and keep in touch with them

2          Pipelines – have a pipeline of people to cover across the range of your skill sets

3          Panic – You don’t need to. You have a pipeline so you’ve got it covered.

Fire at Will !

“Fire at Will” is an order we expect to hear barked out in a war film when our heroes are about to achieve final victory. It’s also the name the media are giving to the Governement’s latest idea on reforming our employment laws. The Government has just completed the consultation phase of a proposal to allow “compensated no-fault dismissal” for employers with fewer than 5 employees. The idea is that it will make life easier for employers and kick-start the economy.

On the face of it, it’s easy to see why. For micro businesses, the cost of employment overheads is significant and anything that will make life easier is welcome. The economy? It’s desperate for help.

But will making it easier to fire employees achieve these aims? Unfortunately, it seems unlikely.

Effectively, employers already have probationary periods of one year (going up to two) where “no fault” dismissals are allowed. If the employer still hasn’t worked out if their employee is good enough (or circumstances have changed) then another, and very obvious, remedy is available.

Sacking employees keeps employment lawyers in gainful employment not because it’s impossible to do it legally but because many employers still shy away from using performance management properly. I’ve worked for large employers where many managers are at best reluctant to appraise the performance of their staff (an ex-colleague put “no appraisals” on his list of essential attributes for his next job) so the idea that micro business owners would relish the thought of doing so is unrealistic.

However, appraisal isn’t about conducting the dreaded annual interview where the boss tells the employee everything they’ve been doing wrong for the past year. It’s about helping the employee improve, develop their skills and become more valuable to the business. The rewards are there. Employees who are valued are also motivated and more productive. Of course it doesn’t guarantee that poorly performing employees will suddenly be brilliant but it does mean that if you try to help them and they don’t respond you won’t have to pay them compensation because if there’s a fault it won’t be yours.

Leaving them to struggle and eventually paying them off without helping them isn’t just bad management it’s bad business.

You’ll have gathered that I’m against the proposal – but I’m not the only one. The CIPD and the Engineereing Employers’ Federation (EEF) are also against it. In a recent article a spokesman for the CIPD described it as “objectionable and unnecessary” and the EEF said there was “little support for no-fault dismissal” among employers in its sector.

Will it help the economy? The CIPD has a view once again – from the same article “There is no evidence that no-fault dismissal would make a positive contribution to economic growth in the UK by encouraging the smallest firms to recruit more employees. Indeed, by increasing job insecurity and reducing employee engagement it would be more likely to damage growth.”

Enough said.

“Score quick runs – but whatever you do, don’t lose your wicket”

Have you ever been asked to do 2 things which are essentially contradictory?

“Just relax, don’t think about ‘x’”

What do you do? Think about – “x” of course.

I was reminded of that when I read an excellent article in The Metro the other day by a guy called John Lees. He argued that if you’re looking for a job you need to stop and plan instead of rushing off in all directions like Corporal Jones telling yourself that urgent action is the answer to your problem. He also said that you need to act quickly before you lose your sense of urgency – which on the face of it is a bit of a problem.

He’s right both times of course – and that’s the really annoying part.

When you lose your job particularly if you’re made redundant you probably feel frustrated and angry (to put it euphemistically) about the whole situation and one or two people are the particular focus of your ire. (‘I trusted him as well’). There’s  also the long drawn out process of redundancy which allows you time to feel even worse. Luckily, this is followed by the only really enjoyable bit – getting drunk with your soon to be ex-friends and colleagues. The getting drunk part is optional but it’s allowed after all you’ve been made redundant ! Unfortunately, it can also be the beginning of your next set of problems.

Your friends at this stage really want to do something for you so they recommend contacts they have who are ‘bound to help’. You scribble them down and a couple of days later start unscrewing the little pieces of paper  they’re on and begin the process of ringing round. Big mistake ! Unless one of your friends says something very unwelcome that will only slow you down like

Do you know what you want to do next?

You breeze into a series of meetings with people who quickly find out that you’re desperate for work – but probably very little else. It’s a waste because they might have helped you.

What you need to do, is to work out what you want to do. Not what you want to do in the next few days but in the next few months and possibly years.

The first part of this process isn’t as you would imagine to write down what you want to do because that’s incredibly hard and will take you ages, but to write down all the things you don’t want to do. This is very easy. You should try it.

When you’ve done this go and see an old friend or ex-colleague you can trust and talk it through with them. At the end of this conversation you’ll have the beginnings of a list of things you do want to do. That’s the way it works.

Here’s a typical list of things you don’t want to do.

1          Work with people I don’t trust

2          Drive in the rush hour for more than ‘half an hour’? – (insert your own figure).

3          Move house

4          Do something exactly the same as my last job

5          Do something completely different (because I probably won’t be able to do it)

6          Do anything that involves working with figures/public speaking/performance appraisals and so on.

This is quite helpful although at first sight it doesn’t seem to be. Let’s look at the same things the other way round.

1          You don’t mind travelling to do your next job as long as it’s commutable.

2          If you have to commute in the rush hour you would like to able to do it by train if possible, unless it’s close to home.

3          You want to do something similar to make use of your strengths but not exactly the same as it would feel like a step backwards.

4          You want to do more of the things you like doing not all of those things you never liked doing.

OK I’ve made a few assumptions but it’s pretty close.

The next step is really obvious. Make a list of things you do like doing, work-related of course. If you find anyone who’ll pay you for sitting round talking about sport and drinking beer let me know ASAP but don’t tell anyone else !

You’ll also need a list of things other people think you’re good at -  even if they’ve never occurred to you. You need that friend/colleague again. When you have a good list – not perfect but good, then you can start ringing round. It means that you when you meet those useful contacts they’ll know what you want. Then they can help you.

John Keenan has previously been made redundant, made most of the above mistakes and now writes eBooks including one called Be Brilliant At Getting Yourself Another Job. Available here.

(Incidentally if you’re an employer who is making staff redundant and want to avoid your employee’s anger being broadcast at a tribunal can I recommend Be Brilliant at People Management – Redundancy & Dismissal everything you need to know in about 25 minutes – it’s very good).

Unfair Dismissal – It needs thinking through

Earlier this month the Government announced that as from next April (2012) the period that employers are exempt from unfair dismissal claims would be extended from 1 year to 2 years. Furthermore claimants will be obliged to pay £250 for lodging a claim and a further £1,000 if the case goes to a hearing – which will only be refunded if the employee wins. This would end according to Chancellor George Osborne the “one-way gamble” where employees could bring claims at  no financial risk to themselves.

As a means of discouraging vexatious or speculative claims this seems (to me) to be a reasonable idea.

However, no solution is perfect. Extending the exemption period may cause further insecurity for employees and given that 70% of our economy is household spend it may turn out to be the wrong decision as it could have unintended consequences. If people spend less because 18 months into a job they still don’t feel secure our economy will suffer.

New and more radical proposals have now been made in a report commissioned by PM David Cameron. It recommends an end to unfair dismissal and argues “this would mean more capable people would replace those sacked, boosting economic growth”. The report wasn’t published by the Government but leaked.

The Daily Telegraph disappointingly, supports some of the report’s more contentious assertions about “coasting staff” – despite the lack of any supporting evidence.

I doubt the author’s (Adrian Beecroft) objectives  in making his recommendations were to encourage poor management and spread uncertainty but once again the consequences of any such action have not been thought through.

Currently the Government is understandably coy (the report’s supposed to be confidential at this stage). However, the BBC is reporting (unnamed) Downing St sources saying it is “unlikely we would go further on unfair dismissal”.

Does this mean there is no further cause for concern? Let’s hope so but before we breathe a sigh of relief we should ask

“Why was the report commissioned?”

“When will it be published?”

“Are the Conservative Party committed to rejecting the proposals?”

If they were it could help reduce uncertainty and promote employment prospects – unlike some of the more outlandish claims apparently made in the report about unfair dismissal.

Let’s hope this time they think it through.

HR – they’re very good/absolutely useless* (* delete as appropriate)

Employing a Human Resource department isn’t free. Like everyone else they have to give value for money. But do they?

“What do they do apart from getting in the way?”

“I might have known! I can’t do anything round here without HR making me jump through hoops first”

“You can’t just put your advert on the board. You have to go through HR”

So are HR people just there to make life more awkward for us or have they got a higher calling?

HR people themselves don’t study for years in order to be a complete nuisance and be regarded as a necessary evil – at best. So why are they?

The truth?!

HR departments are just like any other operational function in a company. You can use them well or you can use them badly. Of course, if you’re using them badly you don’t do it deliberately. It’s like driving a car badly, you just slip into a way of doing things and then you get used to it.

You can use HR to

  • ensure that line managers are “saved from themselves” when it comes to making unwise or unlawful decisions about employees
  • check that everyone gets their handbook and contract
  • keep an eye on punctuality and absence

but if you have a professional  (or team of professionals) and only use them to administer “the rules”, it’s like having a Porsche and only using it to go the shops.

How should you get value from HR?

You can ask them to

  • Not just keep role/person descriptions but help identify what makes an employee successful and work out how you can test for it – at recruitment and for development
  • Promote the company’s brand – your values and standards that make you a good employer and a good company to do business with
  • Help develop your people so they become more valuable
  • Be the exemplar of best practice so that your managers will want to consult them on people issues

After all – that’s what they’re trained to do.

At BBA we made a film with a couple of HR Directors who feel very strongly about HR giving real value and not just being a service department and they present the case more eloquently than I can.

Of course, there is an alternative. You can just leave things to drift along as usual – but don’t complain about the cost of HR if you’re the reason they’re not giving value for money.

It was only a matter of time before someone produced their Top 10 Tips on AWR. But not us – here’s our Top 9

Reflections on the Agency Worker Regulations

1          The Agency Worker Regulations (AWR) are designed to give agency workers a better and fairer deal, so don’t waste time and money trying to get round them. Work within them.

2          If you keep agency workers for longer than 12 weeks, is flexible resourcing your prime consideration or cost saving? If it’s cost saving you need to be careful. If it’s flexible resourcing perhaps you should consider other options. e.g. 3 month temp contracts, talent pools, virtual teams.

3          You should consider harmonising terms and conditions (T&C) for all your agencies or even reduce the number of suppliers. The more sets of T&C you have across agencies potentially the more comparators you need and the greater the chance of making a mistake and ending up in a tribunal.

4          Giving internal vacancy information to agency workers can work in your favour. Effectively they are having a trial period and you may want to recruit the best. It may also ease any concerns about “poaching” damaging your relationship with an agency.

5          You will need to know who falls in scope whenever you take on an agency worker and your agency should be able to tell you.

6          Agency workers will still not have the right to claim unfair dismissal, redundancy pay or maternity leave.

7          Employers will need to disclose sensitive salary information (for comparison purposes) to agencies. What will happen to that information? You can and probably will set up a legally binding confidentiality agreement. However movement of staff within the recruitment agency business is very fluid. What happens to your information when someone leaves an agency and joins someone who supplies your competitors?

8          The regulations are untested in court and until they are some of the detail remains open to interpretation. No one knows for certain what is “reasonable” until a judge defines it. The challenge for employers and agencies is to avoid being the first to find out.

9          Scare stories abound from bodies with a vested interest e.g. trade associations. Remember the fuss about the minimum wage. The way employers and agencies work will change and unfortunately there will be more red tape but if you’re prepared, and seek professional advice it won’t be the end of the world.

AWR – no off the shelf solutions but a range of options

Richard Sheldon from Eversheds LLP in Manchester gives us an overview of some of the solutions available to employers.

Implementing the AWR

Despite the fact that businesses have known that the Agency Workers Regulations 2010 will finally come into force on 1 October 2011, people are only now finally turning their mind to the practicalities of what it will mean, and more importantly what it will cost their organisations to implement.  In assessing the impact for an organisation it is important to remember it is not a “one size fits all approach” as what may work in one business, will not necessarily provide the best solution at another.  Set out below are some of the key questions that businesses should be asking themselves:-

Do the Regulations apply?

The Regulations apply to any situation where workers are supplied to work under the supervision and direction of the hirer by a third party.  There are a number of different schemes and ruses currently doing the rounds, whereby it is proposed to put complicated structures in place to attempt to avoid the Regulations.  Whilst some of these schemes may be genuine, as a general rule it is worth remembering if something looks too good to be true it generally is!

Possible solutions

Leaving aside the inevitable option of revisiting your use of agency labour generally, with a view to mitigating the effects of the Regulations, if your answers to the above questions highlight disparity between those workers and your comparator employees, what can you do?

  • Choosing your comparators / Agency only roles – If your risk assessment identifies large numbers of comparators and potentially significant pay differentials, it may be possible to narrow the areas of work in which you engage agency labour, thereby reducing the pool of comparators. It may even be possible to utilise agency workers in unique roles for which there is no comparator. Tread carefully, however. Unless handled extremely carefully, this may not result in the desired outcome. It will also not alleviate responsibility for offering terms which are commonly available to employees.
  • Introducing a new-starter pay scale – Whilst this will not be viable within all organisations, and will obviously have a wider impact on your ability to recruit staff, one option is to adopt a new-starter rate for new recruits to the business, which would mean that agency workers undertaking the same role, would be paid at this rate.  This needs to be carefully managed, as if after a period of service new starters increase to a standard rate, then the equivalent increase would apply to your agency workers;
  • ‘Swedish Derogation’ – This is an alternative business model which has been widely talked about. The Regulations specifically make provision for agencies to employ agency workers and guarantee their pay (at reduced level) between assignments, subject to certain limitations and requirements. This is a more expensive option for the agency (which acquires the liabilities of an employer) but, through negotiation, and for the appropriate sector or class of worker, could offer a viable alternative for both agencies and hirers, provided that there are steady volumes of work.

Commercial contracts

The introduction of the AWR also provides an opportunity for organisations to review and revise their terms and conditions with agencies. Some will need to do little more than “tweak” existing contracts (for example, where they are content they have what they can to review and mitigate the effect of the Regulations). Others may adopt a more radical approach and decide to consolidate or change suppliers. It is important that the contractual terms reflect what the parties believe the position to be in terms of risk, sharing information and apportionment of cost. If relationships with existing agencies are being ended, consider the terms of the current contacts – do they contain notice provisions? What temp-temp or temp-permanent fees become payable (subject to compliance with the ‘Conduct Regulations’)?

Final thoughts

The above options are by no means exhaustive, and whilst inevitably given the current financial pressures many businesses are under will lead them to review the use of agency workers within their organisation, with a carefully thought out strategy, for those organisation which are heavily reliant of agency workers to not only minimise the costs, but also make actual savings.  This can be achieved through a combination of different approaches such as reducing the number of different suppliers that are used and standardising terms.

Disclaimer

This article is for guidance purposes only and should not be regarded as a substitute for taking legal advice.