Our guest blogger is Liquid Friday Head of Group Operations, Joe Taffurelli. Liquid Friday is an FCSA-accredited provider of umbrella and agency support services that engages workers for use by third-parties in the UK. Below is the first installment of a two-part series about adding a temp division to your UK recruitment firm.
Part 1 of this article covered topics such as growth sectors, marketing, compliance and legislation, right-to-work, pensions and more. Below is the second installment.
When you are focused on winning business, placing candidates and billing clients it can be easy to be complacent. But, in business as in life, we should hope for the best but insure for the worst.
Bear in mind, that if you employ your temp workers on PAYE, you will be responsible for ensuring that they have the appropriate insurances in place as per the terms of the assignment.
Specialist insurers can provide suitable blanket arrangements, or if you engage your contractors through a compliant umbrella company, they should provide sufficient levels of cover.
Public Liability insurance covers against the risk of accidents or incidents which affect third parties, resulting in them making a claim.
Examples include damage to property, injury to third party persons and legal costs. Even very minor incidents can result in massive third-party claims, enough to put you out of business several times over, so it is worth considering this type of policy carefully. Most clients will insist that Public Liability cover is in place before any work takes place.
Professional Indemnity (PI) insurance is to provide cover against possible claims of negligence. If an employee on your payroll makes an error in the performance of their duties or otherwise causes your client financial losses, they may put in a claim against you.
PI covers any damages you have to pay out as a result of such a claim and also your legal costs. Aside from negligence, this type of insurance covers loss of data or documents, intellectual property breaches and cases of libel or defamation.
You must get Employers’ Liability (EL) insurance of at least £5 million as soon as you employ anyone.
Employers are responsible for the health and safety of their employees while they are at work. If an employee is insured or becomes ill as a result of their work, they may try to claim compensation if they believe you are responsible.
Running a temp division or desk can be fast-paced and demanding. You need to ensure you have the infrastructure to cope with the challenge of managing hundreds of contractors for multiple clients.
Payroll and credit control
One of the main differences between running a temp division compared to permanent placements is the logistics of payroll and credit control.
Collecting and verifying timesheets, calculating tax and NI liabilities, holiday allowances, Auto-Enrolment, regular HMRC reporting and chasing payments all adds up to a substantial drain on time and resources.
If there is a chance that these tasks will divert your attention from developing opportunities, sourcing candidates, and building client relationships, you may want to consider an outsourced payroll bureau.
Alternatively, you may choose to engage your candidates through their own limited company, or through a recognised, legitimate umbrella company.
Investing in the right tech tools can help your temp desk run efficiently and smoothly. You can use multiple systems or a single recruitment software platform.
Don’t automatically go with what you have used in the past, as some packages specialise in temp / contract recruitment.
Shop around with your tech wishlist in mind:
- Back-office / payroll
- Online timesheets
- Job site integration aggregation tools
- Cloud telephony
- Email marketing platform
- Social media management
Business Process Outsourcing – BPO
We have already mentioned the benefits of outsourcing your contractor payroll to a payroll bureau or engaging your temps through a reputable umbrella company.
There are also numerous other essential business functions that can be contracted out to specialist third parties.
Depending on your existing infrastructure and in-house skill and capacity, outsourcing some or all of the following tasks to an external provider can offer considerable ROI:
- Payroll funding
- Employment compliance – such as Right to Work, DBS and Employment Reference checks
- Pension Auto-enrolment
- Marketing support
- Employment, HR and tax advice
Working with the right UK partners is instrumental to the operations of a temp / contractor desk, but ensure you put appropriate due diligence into selecting your Preferred Suppliers List (PSL).
Professional advisors and auditors will of course manage this process for you, but if you wish to do it yourself, we can provide due diligence advice.
For support on any of the areas outlined above, just email Joe Taffurelli, Liquid Friday’s Head of Operations support.
Best of luck as you embark on the new phase of your recruitment business journey!