We’ve aimed this blog at the tens of thousands of professionals who work in the recruitment sector. If you are responsible for placing temporary workers in assignments around the country, you’ll probably need to refer them to third-party organisations, such as insurers and payroll companies. Therefore, your agency must have a trustworthy and bullet-proof preferred supplier list (PSL) in place. Here are some of the main reasons you should take your recruitment agency’s PSL seriously. And, if you’re reading this as a contractor, make sure you ask any agency’s you work through for a list of their preferred suppliers – but never feel pressured into using a company you don’t feel comfortable with.
Save time
If you don’t have a PSL in place, setting up one that you can rely on will be time-consuming – we’re not going to lie! This is because you must assess every business thoroughly. You must carry out comprehensive due diligence to ensure they are compliant and add value to your business (and candidates).
Once a PSL is in place, it’s far easier to manage, and this will save you time because you will not have to start from square one each time you review it. It also means everyone in your agency is on the same page. There won’t be any misunderstandings about where candidates can and cannot be referred to – saving more time and avoiding potential issues down the line.
Grow your business
Recruitment is competitive, and there seem to be more and more agencies popping up overnight. Therefore, if you build a PSL with businesses you can trust, you can broaden the types of roles you place candidates in.
For example, if you place temporary workers, you could grow your business by starting to placing drivers and construction workers – if you didn’t already. There will be third-party businesses that can partner with your agency to help with your new venture. And, they’ll be able to support your candidates too – with things including payroll, insurance, etc.
Improve the quality of service
When working in recruitment, you’ll come across candidates from different stages in their careers. Some will know what they want when it comes to their payroll. Others won’t have a clue. Therefore, by having a trustworthy PSL in place, you’ll be able to offer support to your candidates who need it. And, you’ll be confident you’re referring them to payroll providers or third-parties they can trust. Assuming the candidate has a good experience with the company you’ve referred them to – they’ll remember that the referral came from your agency. They’ll be grateful to you for your assistance.
Protect your candidates
If you’re a responsible recruitment agency, it goes without saying that you’ll want to protect your candidates. Therefore, it’s imperative that you can refer them to third-party organisations that you can be certain are compliant with HMRC.
For example, when it comes to umbrella companies, you should only refer your candidates to an umbrella that operates a PAYE model and one that follows HMRC rules and regulations. An excellent place to start is checking out the list of umbrella companies that have achieved FCSA or Professional Passport accreditation.
Protect your recruitment agency
Did you know that your business and senior staff could be accountable if anyone at your agency refers a candidate to a tax avoidance scheme? The Criminal Finances Act 2017 came into effect to target tax evasion facilitators, such as businesses referring people to dodgy payroll companies. Failing to comply with the Criminal Finances Act could result in your business, and possibly senior staff members, having to pay back your candidates’ underpaid tax liability. It’s a piece of legislation that every recruitment agency should take very seriously indeed.
A PSL with well-vetted businesses will mean you can move forward and make referrals with complete peace of mind.
Earn a few extra £££
In the world of business – referrals happen all the time, and they’re a popular way to make extra cash. Therefore, there is every chance you can earn a little extra money by referring candidates to businesses on your recruitment agency’s PSL. However, never be driven by referral rewards from third-parties. It could be tempting to refer candidates to a company that has a questionable reputation but will pay the big bucks for a referral. Referrals as a source of additional income should be seen as a little bonus – and nothing else.
Advice for contractors and freelancers in the UK
We’ve aimed this article at professionals working in the recruitment sector. However, it’s probably a valuable article for contractors and freelancers too – because it highlights the importance of a recruitment agency PSL. Every agency should have a PSL that consists of compliant and well-respected organisations (such as umbrella companies or contractor accountants, for example). However, make sure you don’t ever feel pressured into using the services of a third party if you’re not comfortable with them. And, if you feel like an agency isn’t operating with your best interests at heart, it may be worth looking for a role elsewhere. A recruitment agency PSL should be something you can trust, but this may not always be the case.
