Is agency work the forgotten face of the UK’s modern workforce?

Published on Jobs, Skills and Pay

We hear a lot these days about the ‘gig economy’ and zero-hours contracts. But agency work is just as prevalent and barely gets a mention. Is it the forgotten face of the UK’s modern workforce?

To be fair, agency workers gained some prominence in the summer when Sports Direct agreed to address the various wrongs it had done to staff at its Shirebrook warehouse. These promises proved largely empty, however, when it turned out that most were agency workers to whom Sports Direct owed no duty of care. And that, in a nutshell, is why the secret rise of agency work deserves closer scrutiny.

So are agency workers the new front in workplace exploitation? Research published this week by the Resolution Foundation suggests there is some truth in this picture, but – as with most things in life – the situation is a little more complex than that. For all the headlines about Sports Direct, it’s clear that many people enjoy the flexibility than agency work can bring.

First, a sense of scale on agency work. We estimate that there are 865,000 agency workers in the UK – which puts the number roughly on a par with zero hours contracts. It’s fast growing too – the workforce swelled by 30 per cent in the last five years alone.

But agency work is not just about low-grade work in low-value sectors. Agency workers are a mixed bunch. One in five are in professional or management roles and a similar proportion work in typically higher-paying business activities. There are plenty of well remunerated agency workers in the City, and hipster consultants in Shoreditch. And of course it’s not just in the private sector that this way of working is found – one in five agency workers are in public sector jobs.

It’s not all good news however. Agency workers are younger than average, and lower qualified to boot. A striking 8 per cent of the Black, African and Caribbean workforce is in an agency job – meaning they are three times as likely to be employed via an agency as white workers. Topping the charts are workers from EU Accession and Eastern European countries – one in ten of whom are currently on an agency’s books. Many of these workers already face disadvantages in the workplace. Are agencies providing much needed alternative routes to employment, or exacerbating the barriers they already face?

The injustice associated with agency work was obvious in the case of Sports Direct where workers had fewer rights than members of staff they worked alongside for many years. But agency workers are disadvantaged in other ways too. Take two people with the same personal characteristics, for example, and give them the same type of work. An agency worker would earn 22p an hour less than a direct hire – the equivalent of £430 a year if working full-time.

Money isn’t everything though are some argue that there are other offsetting advantages to this way of work. For example, around one in eight agency workers say they do not want a full-time job, and a further in one in six say they enjoy working on a temporary basis. But the majority clearly do not appear to embrace the role, with three in five saying they would rather have a permanent job.

It’s wrong to use ‘agency work’ as a lazy shorthand for the bottom end of the labour market, or for the types of poor practice that were rife at Sports Direct. But agency workers are less advantaged, less secure and are less satisfied than other parts of the workforce. And with their numbers expected to stand at more than one million by end of the decade, it’s clearly time for us all to sit up and take note.