The Temporary Labour Market: What Challenges Do They Face?

Like many firms, across many industries, temporary labour providers have faced a number of challenges in recent months and for many innovation will be key to achieving ongoing success.

The challenges:

Automation - Recent news stories have highlighted the increasing use of technology and the rise of automation within traditional 'blue collar' sectors of the economy and also now increasingly within 'white collar' industries.

Within 'blue collar' and manual labour sectors, where it is more common for staff to be employed on a short terms basis with higher staff turnover, increased level of automation could potentially reduce the requirement for some job roles. Therefore having a knock on impact on temporary placement firms, who as a result of the reducing demand for labour could see their core revenue streams decline. For example - Amazon are developing drone deliveries, Uber are trialling driverless cars and prototypes have been created which can lay bricks quicker and more accurately than humans can.

The rise of the gig economy - Increasingly workers are demanding the flexibility of deciding when and for how long they work. Whilst some workers enjoy the flexibility and freedom that 'gig' working offers, it can provide employers with challenges around managing staffing levels and it fails to provide workers with the same protections that employees are afforded. However where 'gig' working is well managed, the inherent flexibly allows employers to quickly and easily scale the workforce whilst maintaining staff engagement and commitment.

Brexit - Many lower skilled temporary roles have historically been filled with staff from EU countries, the uncertainty caused by the ongoing Brexit negotiations and the weakening pound is meaning that some EU workers are favouring roles closer to home. This lack of supply leads to unfilled vacancies or increasing costs particularly in the agricultural sector and the travel, hospitality and leisure industries.

Regulatory focus and increasing costs - HMRC has significantly increased its National Minimum Wage and National Living Wage (NMW/NLW) compliance checks. In the care sector specifically, employers may be required to pay 'Sleep in Workers' back pay up to 6 years, as sleep-ins were typically not treated as working time for NMW/NLW purposes and should have been. It is predicted that many organisations may struggle to honour such payments which could cost the industry up to £400m. Had these additional costs...