Cost of contracting could escalate
The Cost of using contractors could increase dramatically is the Government refuse to listen to recruiters!
Recruitment figureheads have commented on the proposals to amend the recruitment agency Conduct Regulations.
APSCo believes it could add millions to the cost of using contractors at a time when many organisations are struggling to reduce their staffing costs, while the REC has launched a membership survey.
The Department of Business Enterprise and Regulatory Reform (BERR) is currently consulting on proposals to strengthen the recruitment agency Conduct Regulations, which were first introduced in 2003.
One of the options BERR is proposing is that contractors who operate through limited companies should no longer be able to opt-out of the Conduct Regulations, despite the majority of contractors currently doing so voluntarily.
The Regulations increase agency red tape and limit the fees agencies can charge clients - for example, where organisations want to offer contractors permanent work. The Regulations also stipulate that agencies must pay contractors even where contractors fail to produce valid timesheets.
APSCo believes if the opt-out is abolished recruiters whose margins are already being squeezed by the recession may pass on these additional costs to their clients.
APSCo chief executive Ann Swain said:
“Most contractors in professional and business occupations opt-out of these Regulations as a matter of choice because of the amount of red tape they impose.
The Regulations significantly slow down the process of getting work, while providing few benefits for highly paid contractors who usually earn more than their permanent equivalents.
“If the opt-out is taken away the cost of supplying contractors will rise at a time when many recruiters are struggling in the current market. The Government cannot simply expect recruiters to absorb these extra costs, so the costs to organisations that use contractors are likely to rise as a consequence.”
Tom Hadley, director of external relations for the REC said:
“The REC played a leading role in securing an opt-out for LCCs during the last major review of the Regulations in 2003 and we will need to take forward a strong collective voice in order to achieve a similarly positive outcome this time around.
Some of the changes could lead to efficiency savings and we will continue to put pressure on Government to deliver on its better regulation agenda. Making it easier to place work seekers into permanent positions is especially important in the current economic climate and will also be of real benefit to the executive end of the market.
The REC is in regular dialogue with the Department for Business and the input from our members will enable us to put forward practical solutions that meet the needs of recruiters on the front line of the labour market.”
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Source: Recruitment Consultant
Tags: AWD & IR35, Conduct Regulations, Contracting Rates, contractor rates, EAA, Employment Agencies Act, opt out
