temporary agency work in light of eu experience annemarie muntz – eurociett president

Temporary Agency Workin light of EU experience

Annemarie Muntz – Eurociett President

Content of presentation

1. Eurociett structure & profile

2. Regulation on Agency Work

3. The Agency Work market in Europe

4. Private Employment Agencies’ contribution to the labour market

5. Agency work benefits for workers and businesses

6. EU Policy priorities for Eurociett

7. Open discussion

4

Eurociett at a glance

• Eurociett is the European organisation of Ciett, the International Confederation of Private Employment Agencies

• Is the only authoritative voice representing the interests of agency work businesses in Europe:

– Recognised as such by the European Institutions, key European stakeholders (e.g. ETUC, UNI-Europa, BusinessEurope) as well as national governments

• Brings together 25 national federations of private employment agencies and 6 of the largest European staffing companies:

– Adecco, Kelly Services, Manpower, Randstad, USG People, Vedior

• Eurociett Members gather private companies operating in the following HR activities: temporary agency work, recruitment, interim management, executive search, outplacement, training

• Eurociett Members gathers 30,000 branches, employ 210,000 internal staff and 3.2 million agency workers on a daily average (full time equivalent)

5

National Federation members

NetherlandsABU

FrancePRISME

UKREC

GermanyBZA

AustriaVZA

NorwayBRF

BelgiumFEDERGON

PolandZAPT

GreeceENEPASE

DenmarkDHS

ItalyCONFINTERIM

SpainAGETT &AETT

FinlandHPL

SwitzerlandVPDS

MacedoniaPARTNER

Czech RepAPPS

IrelandNRF

SlovakiaAPAS

LuxembourgULEDI

SwedenALMEGA

EstoniaEFPRA

PortugalAPESPE

HungarySZTMSZ

BulgariaBG Staffing

6

Corporate Members

7

Eurociett’s long term objectives

• To protect and promote the interests of Private Employment Agencies in order to enhance their long term growth

• To create the most suitable legal environment for the industry to operate in

• To improve the image of the industry and strengthen its representativity

• To seek greater recognition for the contribution that private employment agencies make to labour markets, especially in relation with 3 key aspects:

– employment creation (provide work to job-seekers, stepping-stone to permanent employment, enhance worker’s employability, help to create jobs that wouldn’t exist otherwise);

– access to and integration in the labour market of diversified categories of workers (disabled, first-time entrants, long-term unemployed);

– economic growth and public budget incomes

8

Main past achievements

1. Liberalisation of the legislation: – filing of complaint with the European Commission in 1992 against Italy, Spain

and Germany after which these countries gradually liberalised their agency work regulations: (Spain 1994), (Italy 1997+ Biaggi amendment 2003), (Germany 1992-1997, 2004)

– And thereafter legal recognition Greece (1999), Finland (1993), Sweden (1993)

– Further deregulation achieved in The Netherlands (1998 and 2003), Belgium (1997 and 2003), France (2005)

2. Better visibility/recognition of the agency work sector:– Developing research on the AW industry: strategic reports (McKinsey 2000 –

Bain 2007), review on regulation (Dublin Foundation – 2006), data collecting (

– Entering European social dialogue with Uni-Europa: 2 joint-declaration signed (AWD in 2001, Flexicurity in 2007)

– Recognition of the agency work sector as a contributor to the realisation of the Lisbon objectives in the 'Kok report‘

– Role of agency work in implementing Flexicurity policies has been recognised in the European Commission’s Communication “Towards Common Principles of Flexicurity”

9

Activities and Organisation

• Efficient Political lobbying– Most important function is to help its members conduct their businesses in a legal and

regulatory environment that is positive and supportive• Intelligence monitoring

– Public Affairs Report (monthly), monitoring the latest developments in terms of European policy issues

– Internal membership newsletter (quarterly), to inform about the life of the confederation and its members

– Website which includes a large Research Center• Best practices sharing

– Regular meetings and dedicated seminars with the purpose to share Members’ best practices on topics relevant to the whole industry

– Annual conference • Surveys and data collecting

– Gathering of key data on the Private Employment Agency industry, and development of surveys related to our industry

• A Board (9 members) meeting 4 times a year and a General Assembly (all members - highest ranking decision making body) meeting 3 times

• A permanent Secretariat staff– Since 2005, Ciett and Eurociett have set up a combined permanent bureau, comprising 3

full time employees, in order to strengthen the professionalism and activities of the confederation








7. Open discussion

11

A triangular relationship

Employer : Private employment

agency

Employee:agency worker

Client:User company

where agency worker is assigned

TWA is based on a triangular relationship between a PrEA, a worker and a user company

(not related to fixed-term contracts, subcontracting or self employment)

12

A very tightly regulated market

• A well-regulated industry at international, European and national levels

– International level: • Legal framework provided by ILO Convention n°181 and Recommendation n°188

on PrEAs• Self-regulation provided by Ciett’s Code of Conduct

– EU Level• Posting of Workers Directive• Health & Safety Directive• Personal data protection Directive• Information on employment contract Directive• Draft Agency Work Directive• Eurociett’s Code of Conduct

– National level• Industry mainly regulated by national labour law• Legal framework strengthened by collective labour agreements in many countries• PrEA trade organisations’ national Code of Conduct

• Sector growth leads to legislative revisions (better balance between flexibility and security and/or increased scope)

13

Legal Restrictions in Europe (EU 15)

• ‘Waves’ of legislation in 70s, late 80s, late 90s• Large range of legal restrictions and requirements

– Most countries have licensing and/or authorisation schemes– Sectoral bans frequent (e.g. public sector, construction)– Maximum length of assignment and limitation of contract

renewals– Equal treatment conditions are common– Internal regulations through national Codes of Conduct

• Robust sector-level collective bargaining in most countries

14

Legal Restrictions in Europe (EU 15)Licensing/Authour-isation scheme

Sectoral bans

Limited reasons for use

Maximum length of assignment

Prohibition to replace strikers

Austria

Belgium

Denmark

Finland

France

Germany

Greece

Ireland

Italy

Netherlands

Luxembourg

Portugal

Spain

Sweden

UK (Agriculture)

15

Legal Restrictions in Europe (EU 12 new MS)

• Most EU new Member States have a licensing or authorisation system

• Otherwise half have little or no statutory framework

• Laws introduced recently (ILO relevant)

• Based on a triangular relationship where TWA is the direct employer

• Sectoral restrictions limited to ‘dangerous work’; however, other restrictions apply

• None MS have sector-level bargaining for the time being

16

Legal Restrictions in Europe (EU 12 new MS)

Licensing/autorisation scheme

Sectoral bans

Maximum lenght of assignment

Limited reasons for use

Prohibition to replace strikers

Bulgaria

Czech Republic

Cyprus NA NA NA

Estonia NA

Hungary

Latvia NA

Lithuania

Malta NA NA NA NA

Poland

Romania

Slovakia Slovenia

17

Equal treatment for Temporary Agency Workers

Equal payEqualworking time

Equaloccupational benefits

Time period derogation

Austria none

Belgium none

Czech Republic

Denmark

France none

Germany - 6 weeks

Greece none

Hungary 6 months for Equal Pay12 months for Equal treatment

Italy none

Netherlands None (except for equal pay = 26 weeks)

Poland none

Portugal none

Romania

Spain none

Slovakia

Slovenia

Sweden

UK

18

Yasal engellerin kaldırılması yönünde bir eğilim

Germany

Spain

Portugal

Belgium

France

Italy

Poland

Greece

Japan

Netherlands

Finland

Denmark

Ireland

UK

USA

Sınırlayıcı Liberal

Hukuki ÇerçeveninGelişimi1994-2006

Sektör sınırlamalarının kaldırılması + Azami görevlendirme süresinin uzatılması (2004)

Opening to permanent recruitment (2005)

Sektörün yasal çerçeveye kavuşması (1997) + amaç sınırlamalarının kaldırılması + insan kaynakların şirketlerine izin verilmesi (03)

Sektörün hukuki çerçeveye kavuşması (2001)

Sektör sınırlaması (2004) + süre sınırlaması (2002) kalıdırldı

Azami görevlendirme süresinin uzatılması (1997) + sektör sınırlamalarının kaldırılması (2001)

Hukuki olarak tanıma (1994) + ek maliyetlerin kalıdırlması (2006)

Süre ve sektör sınırlamaları kaldrıldı (98)

Azami görevlendirme süresinin uzatılması + insan kaynakları şirketlerine izin verilmesi (1999)

Kullanım nedenlerinin genişletilmesi (2004)

Hollanda








7. Open discussion

20

The Agency Work market in Europe

• Rather small but significant sector – On EU average, accounts for 1.7% of total national labour force– Total number of Agency Workers = 3.2 million daily FTE (2006)– Around 30,000 branches from 20,000 different firms – Annual turnover of at least €85 billion

• New markets are emerging: countries from Central and Eastern Europe (new EU Member States)

• Sectoral distribution differs between countries– 1/3 directed towards industry/manufacturing (AT, FR, NL, PT)– 1/3 services (EL, ES, NO, SE, UK) and the remainder (BE, DK, FI, IT) more mixed– minority (DK, NL, NO, UK) have significant public sector usage

• Profile of average agency worker:– Mainly low-skilled work, but moving upwards to higher skilled jobs– Male and young workers prominent

• Meets companies’ requirement for more labour flexibility while protecting working conditions (best balance between flexibility and employment security)

21

TAW penetration rate widely varies across countries

0

1

2

3

4

5%TAW penetration rate* (2005)

UK

4.4

Nl

2.6

Fr

2.3

Pt

1.5

Nw Ger

1.0

Sw

0.90.7

It

0.7

Es

0.7

Fi

0.7

Pl

0.3

Gr

0.1

Total working population (2005)*

Lu

2.2

Be

1.9

Ch

1.5

Hr

1.4

I r

1.3

At

1.21.0

Dk

*Penetration rate = TAW FTE as a % of working population (active population including self employed – unemployed)**Average on 19 countriesSource: EuroFound, EuroStat, Ciett, Federgon, Prisme, BZA, ABU, REC, AGETT, German state statistics, ONS, Prognos

Average Europe**: 1.7%

22

100

300

686

700

450

0

2.700

4.000

3.760

9.000

1.144

450

1.184

1.442

1.700

2.500

5.100

6.500

8.427

15.970

Denmark

Portugal

Belgium

Austria

Spain

Italy

Netherlands

France

Germany

UK

2006

1996

Total number of private employment branches per country - Source: CIETT

Number of branches

23

0

91

210

430

361

400

797

88

850

0

400

2.500

5.000

83

131

250

345

410

550

670

1.144

1.200

1541

2.100

5.058

Italy

Belgium

Portugal

Spain

Austria

Sweden

Switzerland

Denmark

France

Poland

Netherlands

Germany

UK

2006

1996

Total number of private employment agencies per country - Source: CIETTFinland, Italy, Portugal, Sweden: 2005 data

Number of Private Employment Agencies

10.462

24

16.000

23.600

30.000

20.600

37.000

41.000

45.000

59.262

61.174

88.232

150.000

168.000

168.000

437.527

1.265.060

602.828

Finland

Norway

Ireland

Denmark

Sweden

Poland

Portugal

Austria

Switzerland

Belgium

Spain

Netherlands

Italy

Germany

France

UK

daily average number of Temporary Workers (Full Time Equivalent) in 2006 - Source: Ciett, 2005 data for Finland, Italy, Portugal, Spain, Poland, Sweden

Number of Agency Workers

25

1994 1996 1998 1999 2002 2003 2004 2005 2006

61

83.2

130

147

200191

157 160150

€ billion – Sources: ING, Goldman Sachs, Ciett

AWB worldwide turnover evolution

26% of total worldwide revenues – sources: Ciett, ING, Randstad

AWB worldwide turnover split up (2005)

Australia & New Zealand

5%

Germany4%

Netherlands4%

Canada2%

France9%

Rest of the World11%

USA39%

Japan9%

UK17%

27

Level of industry consolidation differs by country

0

20

40

60

80

100%

Fr

OthersRandstadSynergie

USG PeopleCrit

Vedior

Manpower

Adecco

19.0

Nl

Others

OlympiaAB

ManpowerAdecco

Vedior

USGPeople

Randstad

6.4

Be

Others

Adec

coVe

dior

USG

Peop

leRa

ndst

ad

3.4

Sp

Others

Manpower

Vedi

orRa

ndst

adAd

ecco

3.0

Ger

Others

VediorAuto VisionZAGTujaHays

ManpowerPersona service

Adecco

Randstad

8.9

UK

Others

RandstadMPSVediorManpower

HaysAdecco

34.0

83 74 69 59 31 20Share ofTop 5 (%)

Total =74.7

PrEA industry revenues (€B, 2005)

Note: revenues only for TAW activities in Belgium and GermanySource: Van Lanschot bankers, Deutsche Bank, Kepler, Credit Suisse, National Federation Statistics

Concentrated market dominated by large global

players

Very fragmented marketFragmented market with local players








7. Open discussion

29

An increasingly recognised industry

• European Union– European Commission – Communication Flexicurity

« Public-private partnership of all stakeholders (public authorities at all levels, educaiton and training providers, social partners, companies, NGOs, private

employment agencies) could contribute to effectiveness of active labour market policies. »

– Kok Report for Commission (« Jobs, Jobs, Jobs » - 2003):« Temporary work agencies should have their place in a modern labour market as new

intermediaries that can support flexibility and mobility of firms and workers, while offering security for workers.[…] Removing obstacles to temporary agency work could significantly support job opportunities and job matching. »

• European Trade Union Confederation (ETUC)– « Temporary work agencies play a useful role in increasingly complex labour

markets » in Services Directive brochure - 2005

• International Labour Organisation: Convention 181 (1997)“Being aware of the importance of flexibility in the functioning of labour markets, and (…)

recognizing the role which private employment agencies may play in a well-functioning labour market, one purpose of this Convention is to allow the operation of private

employment agencies as well as the protection of the workers using their services, within the framework of its provisions.“

30

PrEAs contribution to labour markets

• Provide work to job-seekers and contribute to reducing unemployment (both frictional and long-term)

– employ 3.2 million agency workers in the EU 27 on a daily basis (FTE) and 210,000 internal staff employees

• Help to create jobs that would not exist otherwise– TAW has created 350K jobs over 03-05 in 6 European countries only (UK, Germany,

France, Belgium, Netherlands and Spain), accounting for 24% of total new job creation)– 80% of them are additional ones, not substituting to permanent ones.– Furthermore, the PrEA industry itself has created 15,000 jobs over 03-05 (internal staff

working in TAW branches)

• Act as a stepping-stone to permanent employment– 41% of agency workers are in longer-term employment within one year from their agency

work assignment

• Improve labour market fluidity– match labour force to companies production needs virtually immediately, through their

network of 30,000 branches across Europe– meet a genuine demand for flexible work: 33% of agency workers have a real preference

for agency work

31

PrEAs contribution to labour markets (2)

• Enhance workers’ employability– By keeping workers providing training and by multiplying experience in very specific

working environment

• Play a key role in Active Labour Market Policies– by being reliable partners of public employment services in

governmental programmes,– by putting more people at work and by cooperating with Public

Employment Services

• Help disadvantaged publics to enter the labour market and increase diversity of workforce

– 40% of the workers employed through PrEAs belong to the category defined by the OECD as ‘outsiders to the labour market’ (i.e. long-term unemployed, first-time entrants to the labour market, women returning to the labour market, elderly people, etc.)

• Contribute to economic growth and tax revenues– By putting millions of people at work, PrEAs reduce the unemployment allowances paid

by Member States while increasing public incomes through the social contributions paid by these agency workers

– PrEA services also contribute to reduce undeclared work– in some of the Western European countries, the industry’s tax and fiscal revenues

(income tax, social charges, VAT…) can account for up to 1% of national income

32

TAW plays an active role in different kinds of transitions in the labour market

From unemployment to employment

Between 2 jobsFrom education to work

Between private/family life and work

Role of Temporary Agency Work

• Help ‘outsiders’ to enter the labour market

• The higher the TAW penetration rate, the lower the long-term unemployment

• Be a stepping stone to find a permanent contract

• Enhance workers’ employability through job assignments and vocational training

• Gain experience to prepare entry to the labour market

• Help students to work while studying (apprentice-ship)

• Match a professional activity with aspiration to a flexible way of life or family constraints

33

A large part of TAWorkers were previously student or unemployed

0

20

40

60

80

100%

France

Others

Inactive

Student

Unemployed

Fixed-termOpen-endedSpain

Others

Student

Unemployed

Employed

Germany

Neverworked

LTunemployed

STunemployed

Temporarywork

Employed

Netherlands

Student

LTunemployed

STunemployed

Employed

Belgium

Others

Neverworked

LTunemployed

STunemployed

Employed

UK

Inactive

Student

LTunemployed

STunemployed

Part-time

Full-time

Previous situation of TAWorkers

Source: Etude ‘Regard des Intérimaires’ (BVA for FPETT, Sept 06) / BIBB (Adjusted data for students with IABS) / ABU (Ecorys 04) / Federgon (Idea Consult 06) / REC (BMG Research survey) , AGETT

Employed

Unemployed

Student or inactive

34

TAW is an effective driver against long-term unemployment…

% of LT unemployment* (2005)

0

1

2

3

4

5%

0 2 4 6%

TAW penetration rate (2005)

ItEs Ge

Be

NlFr

UK

R² = 0,84

Note: * Unemployment > 12 monthsSources: OECD, National Federations

35

…And undeclared work

0.0

1.0

2.0

3.0

4.0

5.0

0.0 2.0 4.0 6.0 8.0

UK

Nl

Ger

Fr

Dk

Be

Estimated undeclared work (% of GDP)

Penetration rate (%)

R² = 0.76

Sources: EuroStat, National Federations, Bain analysis

Increased tax revenues








7. Open discussion

37

Main reasons to work through a PrEA

Source: Survey of 700 agency workers, Deloitte & Touche Bakkenist, 2000

4%

5%

6%

7%

13%

26%

39%

work for shortperiod

be able to quit

flexible schedule

work for differentemployers

work between jobs

gain workexperience

could not find apermanent job

38

PrEAs supply companies with skills and workforce flexibility

Reasons for hiring Agency Workers (% of total agency workers)

4%

15%

81%

Providespecialised

skills

Provideemployees for

regular jobs

Help absorbfluctuations

10%

21%

23%

27%

Economiccycle

Unexpectedpeak

Seasonalfluctuations

Replacements

Source: CIETT - “Orchestrating the evolution of Private Employment Agencies“ - 2000

Percentage of Agency Workers

39

PrEAs provide added value HR services

Source: Survey of 500 client companies, Deloitte & Touche Bakkenist, 2000

Percentage of companies indicating “probably”

Could you indicate if in the future you would “probably”’ “possibly” or “probably not” use PrEAs in the following areas?








7. Open discussion

41

Eurociett Public Affairs Priorities for 2007

• Flexicurity (see details below)

• Blocked Agency Work Directive (see details below)

• Debate on the modernisation of Labour Law (see details below)

• Workers mobility and Posting of Workers– Positioning agency work as facilitator for the mobility of workers– Monitoring political developments concerning a better

implementation of the Posting of Workers Directive (enforcement and information of cross-border agency workers)

42

The Flexicurity debate• A communication from the Commission on Flexicurity was

launched last June, aiming at defining European common guiding principles to implement flexicurity

• Commission has identified 4 components to Flexicurity– Flexible and secure contractual arrangements– Effective Active Labour Market Policies– Reliable and responsive Life-long learning systems– Modern Social Security systems+ crucial role of social partners and social dialogue

• 4 challenges to be faced by EU member States– Two-tier labour markets with a large share of ‘outsiders’ and strict

regulation on open-ended contracts (FR/IT/SP/GR/PT)– Little dynamic labour markets with a large share of workers with high

job security but few opportunities to find new employment if fired (AT/GER/BE)

– Dynamic labour markets but with skills gaps (UK, NL, IRL)– Labour markets offering lack of opportunities to ‘outsiders’ due to

benefit dependence or informal work (new EU MS)

• Eurociett uses the debate as an essential tool to shape a better understanding of the positive role the AW plays in the labour market

43

Flexicurity: a concept that balances the interests of both workers and employers

Flexibility

Workers

Develop more work

opportunities

Allow part time & temporary jobs

to gain extra money

Ensure work-lifeBalance

Employers

Enabling fast workforce

adjustments

Improve market position by

responding to changing demands

Workers

Ensure work security

Maintain and develop

employability

Ensure continuity of

rights

Employers

Increase competitiveness

to allow sustainable

growth and job creation

Guarantee access to skills

Develop workforce loyalty

Security

44

Eurociett recommendations on Flexicurity

• The TAW contribution to a better functioning labour market should be recognised, especially regarding its contribution to active labour market policies

– Temporary work agencies contribute to active labour market policies by offering job opportunities, by using their networking experience in matching demand and supply and by improving the employability of workers

– The temporary work industry has signed cooperation agreements with public employment services in many European countries, focusing on the information exchange, on enhancing the employability of workers and on supporting specific target groups (like first-time entrants, long-term unemployment)

• Unjustified obstacles and restrictions to temporary agency work services, which are still widespread, should be reviewed and lifted

– particularly sectoral bans, maximum length of assignments or limitations of renewals

• The TAW industry should be included in the 2008 revised Lisbon Employment Guidelines to ensure that temporary agency work is included as an important element in national labour market policies

45

The Agency Work Directive

• At end of 1990s, European Commission wanted to regulate “atypical work”

– Part-time work: Directive adopted in 1997– Fixed-term contract: Directive adopted in 1999– Temporary Agency Work (TAW): no agreement between social partners nor

EU Member States Commission drafted a Directive

• Since 2002, draft TAW Directive has been blocked in Council– UK, Ireland, Denmark and Germany = blocking minority– Stalemate on Equal Treatment provision (same working conditions between

agency workers and permanent workers) and on lifting restrictions

• Eurociett Position– Current draft Directive outdated– Eurociett not opposed as such to a European regulatory framework for the

agency work industry– New draft should allow for a better development of the agency work industry,

based on the following regulatory principles:• Freedom to provide services & freedom of establishment• Freedom to choose for agency workers, agencies and user companies • Protection of workers rights• Regulatory compliance and controls

46

Modernising Labour Law (Green Paper)• European Commission (DG Employment) launched a public

consultation in November 2006 on how to modernise labour law

• A Green Paper was published calling for input from all EU stakeholders

- Particular focus on workers in vulnerable positions and “atypical” forms of employment

• Main messages of the Eurociett submission:– Temporary agency work is a well-regulated, established form of

flexible employment. – Need to lift restrictions faced by temporary work agencies in order to

create a level-playing field.– Flexicurity concept is to be put forward as an approach for a

meaningful labour market reform.– There is no need to clarify the employment status of agency workers,

as it is clearly defined by national labour law.– The rights and working conditions of temporary agency workers are

clearly defined by national law.

• A follow-up Communication on Labour Law expected in November

47

Why using the services of a PrEA?

• To manage external flexibility needs– To absorb fluctuations (seasonal or unexpected peaks of

output, economic cycle)– To create a shift dedicated to the launch of a new

product/service

• To supplement internal workforce– To handle sick and leave situations– To source and test future employees– To perform work that requires skills not available in-house

• To have access to a full range of value added HR services– e.g. training, recruitment, outplacement, interim management

• To manage HR related administration and red tape

• To increase companies’ productivity by allowing them to focus on core business








7. Open discussion

temporary agency work in light of eu experience annemarie muntz – eurociett president

Documents

agency workers

agency work sector

agency work regulations

permanent employment

employment creation

private companies

european institutions

european commission