What Recruiters Need to Know Before Recommending an Umbrella Company to Contractors

Umbrella Company

So, you’ve established that your contractors are working inside IR35, and you’ve wisely decided to recommend an umbrella company as the best option for them. At this point, they’re still going to need your help, because choosing an umbrella company has many pitfalls for someone who isn’t familiar with the contracting industry, or doesn’t know what to look for. So, how do you know the company you’re recommending is the best one for your contractors?

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They’re accredited members of FCSA

If you only give your contractors one piece of advice about choosing an umbrella company, it should be to make sure the one they choose is an accredited member of FCSA. The term “umbrella company” is not protected, and there are a large number of non-compliant companies using the term. These range from small, newly set-up companies who don’t know what they’re doing, to sophisticated tax avoidance schemes designed to exploit unwary contractors.

Involvement with either type of company would be a disaster for your contractors and for you, and the best protection is to insist on FCSA accreditation, which ensures you’re dealing with umbrella companies who are both compliant and competent.

When we talk about a “compliant company” we mean one who adheres to all relevant legislation, including all laws concerning employment, tax, health and safety etc. You can expect your contractors’ pay to be calculated correctly, and all the correct payments to be made to HMRC. You can also expect your contractors to receive full employment rights, including statutory payments, holiday pay and a workplace pension.

They provide a high level of service

Once you’ve narrowed down the search to FCSA accredited members, you can be reasonably sure of a decent level of service, both for your contractors and for you as a recruiter. Accreditation is difficult to achieve, and umbrella companies who can manage it can be expected to know what they’re doing, and have a commitment to doing things properly, which will itself ensure relatively high service levels.

However, just because they’re all “OK” doesn’t mean they’re all equal. Look for a company with a commitment to continual improvement at the heart of their culture, for example a quality management accreditation like ISO 9001 will ensure operational excellence and the robust, flexible processes needed to ensure consistently excellent service.

They go beyond the minimum

Compliance with the law and a commitment to service should be the minimum you and your contractors expect, and we don’t think “doing the minimum” is much of a selling point. If you’re going to recommend an umbrella company, you need to be sure that your contractors will have a great experience, because anything else will reflect badly on you.

Before recommending an umbrella company, ask what else they offer. For example, Orange Genie employees all get access to our unique benefits and rewards platform, Orange Genie Edge. This includes medical and support services to help them care for themselves and their families, lifestyle tools to improve their wellbeing and a comprehensive discount outset to make their money go further.

 If you have any questions or if we can help in any way, please contact our expert team on 01296 468 483 or email info@orangegenie.com

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