Legislation a burden, but a necessary one, agree leading agencies by Outsauce

Legislation a burden, but a necessary one, agree leading agencies
Outsauce’s compliance campaign moved to London last week, with a round table debate between some of the UK’s leading agencies on the key issues impacting the recruitment industry.   Chaired by Recruitment International, the event at The Gherkin revealed surprising positivity towards the legislative landscape, with those present agreeing that careful policing is fundamental to reducing risk for agencies, clients and candidates alike. But existing regulation isn’t perfect, they agreed, with clarity and identifiable standards still some way off. 

The debate revealed the following valuable insights:

Is existing industry legislation fit for purpose?

Though there’s none that the panel would particularly like to see removed or amended, clarification is required. Much existing and new legislation, they agreed, is ‘fluffy’ and until a test case arises interpreting the law can be tough, with phrases like ‘reasonable action’ wholly unclear. While many cases under a variety of litigation are going to trial, HMRC and tribunals should be doing more to make the outcomes of test cases public. Furthermore, opacity and general awareness is problematic when there are many cases which are settled out of court or before going to tribunal.

Does HMRC tackle non-compliance effectively?

The shortage of inspectors is an issue, it was agreed, with proactive audits very rare. But HMRC and its executive powers are vital - without an inspectorate there would be no effective policing of the industry and no ultimate power to close unscrupulous agencies and service providers down.

Is the recruitment industry properly consulted when it comes to setting compliance legislation?

The consensus between the panel was that government is keen to engage with recruiters and that REC and APSCo in particular are effective at representing the industry and lobbying for change.

But the number of industry bodies is an issue; a single set of standards, it was agreed, would be easier to achieve with fewer representatives. A commitment to achieving consensus is apparent, but the current fragmentation leads to a dilution of message and no single common code.

Has AWR impacted in the way the industry expected?

The impact has been nowhere near as extensive as anticipated, agreed the panel, but it is gathering momentum. A particularly positive side effect has been the strengthening of relationships between clients and agencies with the need to communicate more regularly and share information around candidate pay terms.

Is the industry equipped to deal with 2013’s big recruitment issues; specifically pensions auto-enrolment?

Many of those present have heard anecdotally of agencies planning on encouraging candidates to ‘opt-out’ of the legislation. ‘Short-sightedness’, the panel agreed, with a fundamental disregard of the guidance and the threat of hefty fines for non-compliance.

How much of a role should end clients play in ensuring compliance?

Clients are keen to ensure they are not exposed to risk and SLAs are a fundamental requirement, but for most, compliance is a box ticking exercise and price remains their number one concern. The majority of clients see recruitment legislation as an agency issue – and it’s a role that those present were happy to take on. Part of a good agency’s service, they said, is to help clients remain compliant.

Where end clients must take responsibility, they concurred, is their role in serious incidents of employee exploitation. While gang masters continue to find a market for their unscrupulous practices, the recruitment industry will continue to fight for its reputation as an ethical industry.

Are recruiters taking the issue of compliance seriously enough?

Too many agencies, the panel agreed, are paying lip service to compliance and not doing enough to self-regulate. UK industry as a whole is becoming more ethical and the recruitment sector must follow suit, with reputational risk as much of an issue as the threat of prosecution.  

Thanks to Matchtech, Morgan Hunt, Adecco, Saffery Champness and Sellick Partnership for taking part and their valuable contributions. Look out for the results of Outsauce’s industry-wide survey on recruitment compliance in association with Recruitment International in March.