Up close and Parasol

Service providers in the staffing industry should be stepping up and providing true risk mitigation solutions in order to protect recruitment businesses according to Rob Crossland, Chief Executive of the Parasol group of companies.

Commenting on recent HMRC tribunal decisions, Crossland said: “There is a very fine line between profitability and business failure in the staffing industry and heavy fines and penalties as a result of a tribunal decision going against you can be catastrophic. This affects not only the individual staffing business and their employees but also their clients, the workers they place, and can create negative publicity for our industry as a whole.

“The first lesson to take from recent tribunals is that recruitment businesses are not always best positioned to manage temporary worker remuneration on their own. Their specialism is recruitment and they have the expertise and experience to do this well. They then have the opportunity to partner with an employment services provider to make sure that the workers are managed and paid correctly and compliantly with no impact on their own profitability. Recent tribunal judgements should be a warning to recruitment businesses looking to manage temporary workers in-house that engaging with a specialist service provider is the least risky road to take.

“Selecting the right service provider is the next challenge. In a lot of the cases I see where an employment solutions business has been engaged, the service providers are noticeable by their absence. Ultimately, a lot of the responsibility should lie with them. What advice were they giving? How were they helping their staffing industry partner to mitigate the risks associated with the placement of temporary labour?

“Correctly structured service providers will have a full contract of employment in place, for all of their temporary workers and contractors, which has been tried and tested at tribunal and stood up to scrutiny. Expense dispensations are simply a way of reducing administrative burden, not a marketing tool and should be applied accordingly and salary sacrifice arrangements should be avoided all together. Correctly structured service providers and employment solutions should always ensure that receipts are retained for worker expenses by the worker in case of HMRC inspection and that claims are only made for legitimate expenses at the precise amount of the expense incurred. There are no work-arounds and no exceptions. It’s just not worth the risk.

“The leading providers have worked very hard in recent years and the services we provide are no longer ‘ad-hoc needs must’ add-ons. We are genuine partners in the supply chain for temporary workers who, when engaged with correctly, take on all the risks and responsibilities associated with placing a temporary worker.”