At a recent European-wide recruitment event, attendees debated whether agencies helped in the creation of jobs or simply substituted permanent positions with temporary ones. Christ pher Goodfellow tries to find the answer

Are temporary agency work contracts responsible for genuine job creation or job substitution? That was the question put to attendees of European recruitment industry trade body Eurociett’s annual Stakeholders Conference in Brussels.

Annemarie Muntz, president of Eurociett, has been campaigning to reduce legislation, such as bans on agencies working in certain sectors, believing temporary work can boost jobs across the continent.

But do agencies create work or simply substitute permanent positions for temporary ones? MEPs, trade bodies, professors and recruiters from across Europe debated the question.

Many believe a flexible workforce gives businesses the opportunity to create jobs during demand peaks and fill skill shortages more effectively. However, members of social organisations on the panel expressed concerns that temporary work substitutes permanent roles, reduces job stability and stunts the progress of minority groups.

Trade unions across Europe have been campaigning for tougher legislation to force recruitment agencies to pay temps the same salary and conditions as permanent staff, claiming that the current system allows too many to be exploited and in perpetual temporary positions.

However, Muntz cited Eurociett research, between 2003 and 2006, claiming there is a strong correlation between an increase in the number of agencies and falling unemployment across Europe.

Arguing that peaks in business demand can be absorbed by temporary workers, she added: “If companies didn’t have agencies they would look to internal solutions, such as overtime, which don’t create jobs.”

Catelene Passchier, confederal secretary of the European Union Trade Confederation, thinks thereis a mixture of job creation and substitution. “It’s important to know what job creation is: are there jobs which were permanent, which have become temporary now? The debate is about having jobs with stability.”

Ronald van Bekkum, senior policy advisor of CWI, the Dutch public employment service, thinks agencies create jobs by enabling the unemployed to return to work. “Agencies organise the market better, in terms of getting people into employment. A third of the people who start work with them get a permanent contract in 12 months — that’s the justification for calling agency work a stepping stone.”

However, Roshan di Puppo, director of Social Platform, a network of European Non- Governmental Organisations, disagreed, saying that in her experience, minority groups in temporary work were not going on to find permanent positions. “It isn’t a stepping stone; agencies allow ethnic minorities to get stuck in temporary employment.”

But Catherine Johnstone, a partner in London-based recruiter Catherine Johnstone Recruitment, is adamant agencies have been responsible for legitimate job creation in the UK. She told Recruiter that agencies have been effective at taking people out of the dole queue and giving employers a diverser talent pool to work with.

A Eurociett study reported 669,000 new jobs have been created by private employment agencies between 2003 and 2006. It estimates only 20% of these positions were created by job substitution.

Many recruiters would argue that temporary work creates jobs by reducing alternative illegal staffing options, giving employers an opportunity to cover staff absences, and absorbing demand peaks.

However, to end concerns that agencies are causing job substitution, forcing workers into   jobs that don’t have stability, agencies must continue to help temporary workers gain the skills they need to move into permanent work. That’s if they choose to work permanently instead of opting for temporary flexible work.