Risk and temporary agency labour

A few weeks ago we looked at the CIPD’s predictions for the next 20 years in procurement. Last week we looked at the role technology plays in the procurement of temporary agency labour, this week we discuss risk.

Arguably the primary procurement function is cost-reduction; however risk management is becoming increasingly as important. In a faltering economy the chance of supply-chain issues is heightened, couple that the impact of natural disasters and supply chains can suddenly look very weak.

When it comes to temporary agency labour, risk is often overlooked – the only immediately obvious issue being if a recruitment agency should fall into administration. Legislative risk is also a factor though, and with an increase in legislation directly regarding or indirectly affecting temporary agency workers over the last few years, legal mitigation is imperative.

Last year the implementation of the Agency Workers Regulations (AWR) saw many companies preparing to reduce their use of temporary agency labour or forecast an increase in cost. Later this year pension auto-enrolment legislation is set to increase costs again. Procurement professionals need to look at both the financial impact of such legislation as well as the operational implications should their temporary agency workforce need to be reduced.

Through the use of a vendor neutral managed service provider risk and the associated costs can be managed and often reduced. A recent survey by TEAM (The Employment Agents Movement) found that 53% of supplying agencies have increased charge rates as a result of the AWR. At de Poel we have invested significant time and cost in developing our e-tips® system, in order for clients to be able to easily manage the AWR. This removes the necessity for agencies to develop their own management system saving cost which would inevitably be passed on to hirers.