Why is compliance important?

The recruitment industry and the management of contractors has presented challenges and concerns for some time. Industry doesn't like uncertainty and the use of intermediaries is governed by a complex web of rules, regulations and legislation.

An understandable level of confusion and lack of knowledge has allowed unscrupulous providers to survive and thrive. The perceived lack of enforcement seems to add a spirit of adventure and deceit which has resulted in a rising number of scams, contrivances and exposes.

In the resulting climate of increased regulatory scrutiny and high ethical expectations a reputation can be easily damaged and corporate scandals can be damaging and expensive. This has moved compliance up the corporate agenda.

Unfortunately compliance comes at a cost and in times of skill shortages where the market is candidate driven it throws up a choice - is the supply chain going to absorb the cost? Is the cost being passed to the candidate? Or, are we going to ignore compliance?   

One of the costs of compliance is the training and education of recruiters' sales consultants who have powerful positions of trust with candidates. The quality of advice will influence their choice of intermediary. Poor, or incentive driven, advice may lead the candidates to ignore the importance of compliance to the supply chain and be pushed towards unscrupulous providers offering attractive returns, usually too good to be true. 

But it’s not all bad news, there are many recruiters operating with fully compliant preferred suppliers lists and many intermediaries offering fully compliant services. Choosing the right compliant preferred supplier has been made easier by using one of the independent third party accreditation schemes to strengthen the due diligence process and as a base list. Here is a comparison of the two best known and respected accreditation organisations:

Orange Genie Group is accredited by both organisations – Why?

Currently Orange Genie is the only Umbrella and Accountancy provider to be accredited by both FCSA and Professional Passport.

Although compliance is central to our beliefs our recognition by both was more about timing than design. Professional Passport was the only specialist accreditation organisation in 2009 when we applied to join APSCo. The process was thorough, professionally undertaken and gave us an insight to best practice to which we should aspire.  

In 2010 some of the larger providers got together and formed FCSA with the sole aim of driving up standards. Their published code of compliance gave us a clear standard to work towards and was more detailed and stringent. The use of regulated independent assessors makes the annual accreditation process much harder.     

Both organisations have their strengths and weaknesses: FCSA is very transparent, develop their codes of compliance with input from HMRC, and have independent regulated assessors. Professional Passport was first to market is more commercially driven and its strength is in marketing.

We dismiss All Umbrella Companies Are Equal as a serious accreditation scheme, as self-assessment is a fundamentally flawed model.

There is a cost to genuine compliance but we believe it’s important to offer our staff, clients and stakeholders assurance that we are in business for the long term and that we care about their welfare, reputation and well-being.

Compiling a Preferred Supplier List?

Both FCSA and Professional Passport provide lists of accredited members which can be used as preferred supplier lists. This method of managing compliance is growing and being adopted by all Recruiters, large and small.

Some recruiters believe they are not allowed to refer their clients to a particular provider over another, but there is no legislation in place preventing them from doing so. Indeed best practice in supply chain management supports the adoption of preferred suppliers to strengthen compliance, improve productivity and to save costs.  

Referring candidates to good service providers is a key factor in strengthening your own relationship with them and in a candidate led market this would seem to be a sensible strategy.

To find out more about how Orange Genie can support you and your contractors please call us on 01296 468483 or email us at info@orangegenie.com

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