UK recruitment firms are adopting a “no-nonsense” approach to tackling delinquent payments, new research has shown.
Data from Hilton-Baird Collection Services reveals that staffing companies have had much more success in dealing with outstanding invoices than firms in other industries. Just 2% of recruiters have had to write off more than 5% of their turnover during the past three years, compared to 11% of businesses nationwide.
More than half of recruitment companies have used small claims courts during this period, while 37% have applied statutory interest to overdue invoices. Some 26% have implemented a written credit policy for staff to follow and 23% have credit insurance in place.
The report said that recruiters were “leading the way when it comes to taking a no-nonsense approach to late payment.”
However, the study acknowledged that there is more work to be done to combat the problem. It revealed that 40% of staffing companies have had to increase borrowing as a knock-on effect of late payments, compared to a nationwide average of 30%.
More than one in three (34%) have had to delay tax payments to HMRC as a result, against just 19% nationwide.
Alex Hilton-Baird, managing director of Hilton-Baird Collection Services, claimed the study highlighted why clamping down on the “plague” of late payment should be a priority for the next government.
Have your say
Are you a recruitment firm boss? Has your agency been hit by late payments? How have you protected yourself against the problem? Join in the discussion on Twitter, or leave a comment below.