Temporary agency work: evolution, regulation and implications for performance

Temporary agency working continues to grow in the UK. The purpose of this paper is to look at a number of important developments in the agency industry, which generate implications for the performance of agencies, temps and the user firms in which temps work and to set out some of the key performance implications of these developments. These developments are: the increasingly complex set of contractual arrangements between agencies and user firms; the changing regulatory environment; and the changing role of agencies in pay setting.

The paper reviews the state of the art literature on agency working, and draws on 15 years of primary research and secondary analysis of the sector by the authors.

The paper shows that there is a proliferation of models of temporary agency worker supply, some of which involves agencies playing a greater role within firms in the management of temps, with other involving a deliberate and strategic distancing of client firms and/or agency in the day-to-day management of temps. This creates significant challenges for the management of temps. The paper also finds that there are significant tensions and challenges arising from the implementation of the Agency Working Regulations, even though these regulations have the potential to raise motivation and performance of temps.

The management of temps creates significant challenges for organisations and agencies. New models of supply of agency labour have the potential to make these challenges even more problematic, if not addressed effectively. The implications of the shifting regulatory and political environment also need closer scrutiny, particularly in the context of the recent EU referendum result in the UK.

The paper sheds light on a number of new developments in the agency sector, and by demonstrating their effects on organisations, agencies and temps, draws out some of the performance implications of the continued and changing use of agency temps.