5 December 2016

Why agency work is better than no work


We must congratulate the Resolution Foundation for their startling findings about agency workers. They are reaching for the smelling salts in that most maiden auntish manner because they have discovered that there may soon be as many as one million people working in that way.

I, on the other hand, think their findings are marvellous news, especially when you see who is actually taking this work.

It is the young and uneducated. One in five agency workers is under 24 and one in four has only studied to GCSE level or below. So why all the complaining?

Bear in mind that there are no guarantees, when you hire someone, that they will work out in the job; the ability to use agency workers means the risk and cost of recruiting untrained and untested people is reduced.

A staff employee has certain rights – which includes protection against unfair or even immediate dismissal. This is a cost to an employer and the younger and less trained the potential employee, the greater that cost.

So if this agency work didn’t exist, then the chances are said employee probably wouldn’t be given the chance in the first place.

So in this way, agency work reduces the youth unemployment rate. Which is a good thing.

Resolution also notes that many agency workers would prefer to be in a more permanent job. No doubt they would. But surely it’s better to have a job and an income, albeit agency work – than nothing at all?

Finally Resolution observes that the UK has many more such temporary jobs than our continental confreres. Quite so and this is one of the glories of the British labour market.

It’s why when the Crash came, unemployment here did not soar as it did in Southern Europe. Agency employees, unlike full-time ones, are not a permanent millstone of costs upon the organisation.

Instead, it was possible to juggle hours, trim benefits a bit and put up with some downward pressure on wages – none which was particularly desirable – rather than end up with the four or five million unemployed which some were predicting back in 2008 and 09.

Britain has the most flexible workforce in Europe. Yes, this means more temporary workers and more agency employment. But it also means a lower youth unemployment rate, a lower unemployment rate in recessions and, obviously, a greater choice for workers about how they wish to organise their lives.

Employers are released from the costs and risks that permanent employment status burdens them with.  The Resolution Foundation by complaining in this manner is  spectacularly missing the point.

Tim Worstall is senior fellow at the Adam Smith Institute.