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Does legislation threaten recruitment industry growth?

We’ve run a number of events recently as part of our Gear up for Growthcampaign and though the audiences at each venue have been different, their chief concern has been consistent that the recruitment industry continues to be hindered by onerous and confusing legislation.

Onshore Employment Intermediaries has unsurprisingly been the hottest topic and the questions have come thick and fast for the legal experts in the room. HMRC has come under fire for the brevity of its consultation period and the lack of clarity around the most appropriate response to the legislation, as it’s become clear that the majority of agencies are navigating the requirements themselves.

Determined to remain compliant, they are avoiding the more dubious approaches, such as the Elective Deduction Model (EDM), which Outsauce has stated many timessits far outside the spirit of the legislation, but without clear guidance, many are interpreting the law in their own way and setting their own rules. The hope is that HMRC will light the way in due course, or that case law will set the precedent they so desperately need – following the pattern of AWR.

Of course it follows that the agencies present at the events are those who are keen to engage in debate and remain on the right side of the law, but there’s clearly a feeling that enough isn’t being done to penalise those who aren’t – and a grudging acceptance that it’s all too easy for unscrupulous operators to & lsquo;get away with it’.

But & lsquo;bad’ recruiters aside, there’s certainly a belief that agencies as a group continue to bear the brunt of all this legislation and a desire for HMRC to hold the entire supply chain to account - including the end client. Until the end client takes some responsibility, our attendees unanimously agreed, margins will continue to be forced down by non-compliant operators, and the reputation of the industry will continue to be tarnished.

We tend to agree - as a compliant service provider we feel similarly held to account by & lsquo;bad’ umbrellas, but recognise our joint responsibility to work with agencies to promote & lsquo;good and proper’ recruitment.

So with this in mind, is it back to the perennial debate around a standard industry code of conduct?

The REC, APSCo and other industry bodies continue to push for greater representation for the recruitment industry at the board table of UK plc, but as long as the industry is left to police itself, the question remains whether it will ever receive the support and respect it so rightfully deserves.

Whether a standard code of conduct is the right way to go remains to be seen, but we’re certainly clear on one point that the industry should be embracing a positive agenda and focusing on growth, rather than being mired in introspective debate around the nuances of legislation.


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