The temporary employees who will lose their jobs work alongside the same unionized and well-compensated workers for the carmaker, but they are actually employees of Manpower, a job agency. Jaguar Land Rover and other firms have turned to these agencies as a way to help them better manage headcount when demand is down.
There were about 800,000 agency workers in the U.K. compared to 60,000 in 2010, according to an analysis by Resolution Foundation, a think-tank. The firm surveyed 500 human resources managers in firms that tapped agency staff and learned that about 33% relied on the agencies to make strategic hires.
Some companies could use the strategy to undermine pay for their own employees.
"But in JLR's case, new starters follow the same pay-progression whether or not they are agency workers; rather, the benefit is flexibility," the FT reports. "It is far easier to dial down the number of agency staff than go through the hassle, expense and notice periods involved in making employees redundant."
The strategy also allows for a longer tryout period to see if companies want to keep the workers permanently. But the workers most likely to be losers in this kind of arrangement are younger, newer workers.
"They are bearing a disproportionate share of the risk of a downturn in demand without being paid a premium in return," the FT reports. "And some of them have now lost their roles abruptly due to a decline in the sale of diesel cars."