There has been a lot of talk in the recruitment media recently about the use of umbrella companies and their role in the freelance chain. Some say that recruiters couldn’t survive without them while others are a little less convinced.
Since the intermediaries legislation, the big buzz word in our industry has been ‘compliance’. Or to put that in the context of an umbrella company, how does a recruiter know that their preferred suppliers are operating on the right side of HMRC and, more importantly, are not going to go bump in the night leaving them with a long line of disgruntled contractors?
Elan is a good example of a recruiter that’s recently taken a more proactive approach to it’s umbrella company preferred suppliers list (PSL) in an attempt to mitigate it’s risks under MSC, as well as protecting it’s contractors from an ‘Albany type‘ scenario. Indeed, according to some reports, this type of detailed RFI and RFP (request for information/proposal) review is set to become commonplace and has already been welcomed by the likes of the REC.
For Pulse, the Elan review was one of the most meticulous we’ve seen which is why we are now just one of 15 companies (from an original list of 85) on their newly consolidated ASL. And who could blame them? If an umbrella company goes under, not only does the recruiter have a financial responsibility to their contractors but the reputational risk to their business can be equally as damaging.
Chris Futcher is the Managing Director of Pulse Umbrella.
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