Agency workers in UK exploited: Resolution Foundation
Full-time agency workers in the UK often earn hundreds of pounds less each year than employees doing equivalent work, according to a report from the Resolution Foundation. The think-tank is launching an 18-month investigation into such employment. Agency workers, who are often overlooked due to a focus on zero-hours contracts, also lack rights like sick pay and parental leave. Although 54% of agency workers are men, 85% of new temporary agency staff recruited in the last five years are women. Ethnic minorities are three times more likely to work for agencies than white workers.

Britain’s rapidly growing army of agency workers is as serious an issue as zero-hours contracts, with full-time agency staff earning hundreds of pounds a year less than employees doing the same jobs, according to a new report into the issue.

The Resolution Foundation thinktank warns that agency staff are the new ‘secret agents’ in the UK labour market, as it begins an 18-month investigation into the whole area of agency work.

Its report deplores that the “exploitation of agency staff remains unaddressed,” while the treatment of staff on zero-hours contracts at places like the Sports Direct warehouse in Shirebrook has made headlines and prompted changes.

Lindsay Judge, senior policy analyst at the Resolution Foundation, said: “While zero-hours contracts are often in the news, agency workers are the ‘forgotten face’ of the modern workforce, despite being just as prevalent across the labour market. This fast growing group is not just made up of young people looking for temporary employment as some have suggested, but instead includes many older full-time, permanent workers.”



Agency work is booming, but it means an average pay penalty of 22p an hour, equivalent to £430 a year for those working full-time, according to the report, entitled Secret Agents: agency workers in the new world of work. The loss of earnings rises to 45p an hour for permanent agency workers.

Agency workers also lack basic employment rights: they are not entitled to sick pay or parental leave pay, have no notice period and little recourse in the event of dismissal.

Despite the stereotype of agency workers being short term and temporary, half of all agency workers say they work on a permanent basis and three-quarters work full time.

The number of office temps, bank nurses, fruit pickers, IT consultants and other agency staff has grown by 30%, or 200,000 people, to 865,000 since 2011 and is set to swell to a million by the end of the decade, according to the independent thinktank’s analysis of Labour Force survey data.

That data shows that:

The number of temporary agency workers providing holiday cover, Christmas temps and seasonal agricultural workers has risen to a 25-year high of around 340,000.



The foundation has also identified 440,000 permanent agency workers; a further 66,000 who are officially self-employed; and 20,000 who are agency workers in their second jobs.

Over the last 18 months, 14% of agency workers were also employed on zero-hours contracts.

The foundation acknowledges that there are good reasons for some employers and workers to use agencies – namely flexibility, variety and absence of bureaucracy – but warns that many do it out of necessity rather than choice. More than 60% of temporary agency workers would prefer to be in a permanent role.



TUC general secretary Frances O’Grady believes many agency workers are getting an unfair deal.

“Agency workers don’t deserve to be treated like second-class citizens. But they are often paid less than their permanent colleagues, even when they do exactly the same job,” says O’Grady.

“We need the government to toughen the law to create a level playing field for agency workers. Too many employers are getting away with treating them unfairly.”

Agency work is most prevalent in the healthcare and social sector, where 18% of all agency staff work, closely followed by manufacturing (17%) and business activities (17%). The latter includes conference organisers, credit rating agents, business consultants and literary agents. Nearly one in five agency workers are in London, but the East Midlands has the largest share of the local labour force working in this way (3.2%).

While 54% of all agency workers are male – the same gender split as for overall employment – women account for 85% of the growth in the number of temporary agency staff in the last five years.

In October, the parliamentary business, energy and industrial strategy committee launched an inquiry into the rapidly changing nature of work, agency workers, the self-employed, and those working in the ”gig economy”. It comes after its inquiry into working practices at Sports Direct, news stories about the use of agency staff at Asos, concerns about couriers at Hermes and growing questions about the status of those working in the ‘on-demand’ economy for businesses such as Uber and Deliveroo.

Judge said: “It is important that the discussion of the non-traditional parts of work in modern Britain consider the relatively lower pay that agency workers receive compared to identical employees in similar jobs. This merits serious examination from government, with an official measure of agency workers being a good place to start.”

Agency workers defy stereotypes: many work in high-end industries such as IT consultants, and the majority are not low-skilled migrants, stay-at-home mums or students as is often thought.

However, the research also found that agency workers are disproportionately drawn from ethnic and other minorities and are more concentrated in low-paid industries and lower-skilled jobs.

The TUC highlighted the growing use of the loophole known as the Swedish derogation. This loophole allows agency workers placed with companies to be paid less than direct employees, provided the agency agrees to continue paying them for at least four weeks at times when it is unable to find them work.

Agency workers are more likely to be younger and less qualified than the rest of the workforce, and four out of five are white. However, 8% of all black and African Caribbean workers in the UK are agency staff, even though they only make up 2.7% of the overall workforce.

Six in 10 agency workers are UK nationals, compared to more than eight in 10 in the overall workforce. EU nationals account for 22% of agency workers while people from the rest of the world make up 17%. Ethnic minorities are three times more likely to be agency workers than white workers.