Over the last decade, we have seen a huge increase in the number of recruitment agencies being set up with over 30,000 currently operating in the UK. This expansion is driven in part by some recruiters working under the assumption that it is straightforward to set up and run a recruitment agency, as there is very little government regulation of this sector. However, this would be an incorrect assumption.
The new IR35 government legislation that should come into effect in April 2020 seeks to redefine the IR35 rules for contractors supplied to the private sector. As the draft legislation has not been made public yet, the best everyone can do at the moment is speculate about the proposed changes and how it will impact recruitment agencies.
• Consultants leaving employment to create agencies is causing heightened competition • Candidate shortage is high due to low unemployment. Brexit may exacerbate this by lowering access to EU workers • Agencies wishing to attract top candidates must do more • High operational costs are challenging agencies to find savings while remaining competitive • New approaches must be considered by agencies in 2019
Regardless of the relatively new General Data Protection Regulation (GDPR) the recruitment industry have always had a responsibility to protect the data that they control. Whether you are an agency or an umbrella, failure to protect this data presents a significant reputational risk to your business and the ramifications of which could prove to be catastrophic.
• IR35 changes to the public sector have introduced new risk and challenge to contractors and hirers, particularly within the recruitment industry • Proposed IR35 changes will see the legislation apply to the private sector from April 2020 • Contractors being ‘inside’ or ‘outside’ IR35 is determined by hirers and recruiters • Under IR35, many workers have become employees of their hiring company • This has worsened the talent shortage common to recruiters and the industry overall • Recruiters and contractors must now prepare in advance to ensure compliance
• Morrisons have been found liable for a data leak performed by a disgruntled former employee • Over 5,000 employees have sued the company, at a total cost of over £2,000,000 • This risk is relevant to the recruitment industry • Recruiters must recognise this risk and take steps to protect their operations from the dangers of insider threat and non-compliance to GDPR • A set of practical steps are provided in this article to help recruiters do so
