Better regulation

A lot of things in ireland seem to be changing these days. How we live our lives, how we interact, how we do business.

Like many sectors, the recruitment industry is also changing. And not just in Ireland.  Worldwide, the way firms view and use recruitment consultancies is set to significantly change in the next few years.

Last month the World Employment Conference took place in the Croke Park Convention Centre. The conference had a very particular target; how to reconcile labour  market flexibility and work security, given that companies and workers alike both want their own brands of flexibility and security.

One of the conference’s centre-pieces was a report by global management consultancy firm, Bain & Company, on how the agency work industry contributes to a better functioning labour market. Even though the report  focused on certain european countries, it clearly pointed out that its conclusions and recommendations were applicable back home In Ireland

So what did they find out?

The boffins from Bain & co. discovered that Temporary Agency Work (TAW) does not step on the toes of permanent employment, as they serve different needs. TAW is used to manage output, workflow and activity fluctuations, which could not be covered by permanent contracts. The knock on effect is that by creating additional jobs TAW helps to reduce unemployment.

This claim is supported by hard facts. From 2003 to 2005, the Private Employment Agency (PrEA) Industry in six european countries contributed to the creation of 300,000 additiional net jobs.

They report also found that the PrEA Industry  reduces both frictional and long term unemployment, reinforces the competetiveness of companies, helps the function of the labour market through a better match of supply and demand of work, reduces undeclared work, and increases public revenue, saving public spending over and above other industries. It also helps workers learn new skills, enhancing employability and offers flexible working conditions to fit in with people’s lives.

It would seem that these positive effects of the PrEA Industry are echoed here in Ireland. Recruitment firms provide temporary work that gives greater flexibility to employers, allowing them adapt their staff levels quickly to better manage their labour costs.

But the Bain & Co. report maintains that both here, and in Europe, the PrEA industry gets bad press. Most people think that TAW work is unskilled and unglamourous, and normally is the preserve of dull and repetetive jobs. This is simply not the case.

In my firm, maryb.ie, we place a huge amount of temporary workers in challenging roles and huge responsibilty. Earlier this year, for example, a young woman from Northern Ireland who was unsure of her career path chose to temp with us. She started temping with a rail systems company. Her responsibilities were varied, covering monthly reports, infrastructure organisation, document retreival and health & safety. After six weeks the company offered her a permanent position, which she accepted.  This sort of story occurs regularly.

Across Europe, the PrEA industry faces unjustified regulatory restrictions. Thankfully, no such restrictions exist in Ireland at the moment. But a review of the 1971 employment act has been mooted.

Frank Collins is the president of the National Recruitment Federation, a voluntary organisation set up to establish standards and codes of practice for the Irish recruitment industry. According to Frank, suggestions such as maximum contract lengths and equal rates of pay will impair the abilitiy of businesses to avail of the flexibility that TWA allows. Any such changes will also effect candidates, who, for whatever reason, chose temporary work. 

Frank also believes that there is confusion over what any new regulation relating to the recruitment industry should do. “Some trade unionists are claiming the act should prevent agencies paying below the minimum wage”, Frank states. “But this just shows up the lack of understanding about the irish recruitment industry. An agency cannot pay below the minimum wage, never has and never will. Like everyone else, agency workers are covered by pre-existing employment laws.

“The industry is supportive of any proposed acts”, Frank continues. “But if there are going to be changes, the emphasis should not be on more regulation. It should be about better regulation.“