UK firms could see a 5% increase in annual pay costs due to Agency Worker Regulations (AWR), which come into force from 1 October, according to multi-sector recruiter Reed.

Reed’s analysis of 30 companies and 30,000 agency workers across 1,300 roles to assess the impact of AWR found that if the regulations had been in place over the last 12 months, those companies would be facing additional costs in excess of £7m — equating to a 5% increase in pay costs for UK companies.

Linda Marshall, head of HR services at Reed, says: “Government consultations suggest that compliance will be time-consuming, with an average of 1.5 hours work per agency worker.

“From our own research, we’ve found that two thirds of businesses use agency workers for both short and long-term assignments and over 30% use their agency workers for assignments that last longer than 12 weeks. This makes them liable for AWR considerations. It’s important that businesses plan now for AWR as the first 12-week qualification period kicks in at the end of this year.”