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Auto-enrolment sparks unprecedented PSL adoption among recruiters

Auto-enrolment sparks & lsquo;unprecedented’ PSL adoption among recruiters

PENSION auto-enrolment has sparked an unprecedented shift towards the adoption of preferred supplier lists (PSLs) amongst recruitment agencies, according to the UK’s largest professional employment organisation.

Parasol says the legislation is prompting a growing number of staffing businesses to adopt a pro-active approach to supply chain management, as they seek to protect their reputation and finances.   

Anita Whittle, chief operating officer at Parasol, said: “The introduction of the Agency Worker Regulations (AWR) in October 2011 convinced many recruitment agencies to draw up a PSL, and auto-enrolment is further accelerating this process.

“Naturally, agencies do not want to be dealing with 80 or 90 providers with different staging dates, given the ongoing administrative headache this would cause.

“Even more significantly, auto-enrolment means that now, more than ever, an agency has to be certain that any given provider is the true employer of record for its contractors in the eyes of the law.

“If a provider cannot demonstrate that it is the employer of record for a contractor or flexible worker, the agency or its client could be left to pick up the tab for that worker’s pension.

“Carrying out due diligence into the true nature of the employment contracts offered by providers – a key element of the PSL implementation process – is therefore more important for agencies than ever before.”

Warrington-based Parasol has provided professional employment services to more than 53,000 skilled employees since its launch in 2000.

The company works with major recruiters including Hays, Alexander Mann Solutions, Capita Resourcing and Reed. Parasol provides contractors with full employment and is responsible for all their employment rights, saving agencies money and mitigating the risks they are exposed to.

Research carried out by Parasol forecasts that agencies employing temporary workers on a PAYE basis could face an initial setup cost of at least &pound25,000 as they battle to get to grips with auto-enrolment.

Anita added: “At a time of heightened media scrutiny of unethical offshore umbrella companies, agencies that work with such organisations are themselves at risk of becoming embroiled in controversy.

“Unfair as it may seem, the perception of guilt through association is a very real danger for agencies working with umbrellas at the less reputable end of the market.

“The process of constructing a robust PSL will enable an agency to steer clear of offshore and unethical providers, safeguarding its reputation in the event that the media’s gaze fixes on it and its supply chain.”

Click here to download an informative guide exploring the benefits to recruitment agencies of having a rigorous PSL in place. Click here to download Parasol’s auto-enrolment summary document. 


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