Agencies Lose £2.5 Million Due To ‘Hire And Fire’ Ethos
Agencies are losing around £2.5 million over a two year period because of their ‘hire and fire’ attitude towards employment, according to the latest research from the IPA.
The Hadden study on flexible working suggests that the use of alternative resourcing models needs to be seriously considered if agencies are to conserve valuable funds. Possible solutions to the problem include short-term, part-time, or freelance contracts and the outsourcing of non-core functions.
Almost 93% of people in large agencies were found to be employed on full-time permanent contracts, compared to just 2.5% on part-time contracts and 1% on outsourced contracts. The IPA claims this suggests there is little strategic interest in developing ‘atypical’ types of employment.
This was confirmed by the fact that the majority of agencies surveyed consider the use of non-permanent employment to be a reactive solution to unanticipated workload, rather than a strategic approach to managing human resources.
IPA director general, Hamish Pringle, said: “We know that redundancy has been a major concern for the last two years. Time and time again client defections, financial pressures and the need to keep up group margins on a quarterly basis have forced hard decisions.”
He added: “Hadden suggests that the use of alternative resourcing models needs to be seriously considered – e.g. short-term, part-time or freelance contracts and the outsourcing of non-core functions. We believe this report to be a wake-up call for the industry.”
Recent research by the Communications Agencies Federation claims the outlook is improving and agencies are now more optimistic about the business climate than they were earlier in the year (see Outlook Improves For Communications Agencies).
IPA: 020 7235 7020 www.ipa.co.uk
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