The Importance of Managing Risk in the Temporary Workforce Supply Chain - Andrew Fahey, Director, Brookson

1. The importance of managing risk
in the temporary workforce supply
chain
Andrew Fahey
Commercial Director
Brookson

2. The role of the flexible workforce
within the UK economy

3. Who are the flexible workforce?
Definition - Workers providing their services to end clients
but not via a permanent employment relationship

4. Source: REC 2014
On any given day in the
UK recruiters place 1.1
million people in to
temporary work
assignments.

5. Growth of flexible workforce
Source: REC 2014
In July-September 2008 the number
of temporary workers stood at
1.384 million. In February-April
2014 this number was 1.673 million,
thus representing a 20% growth in
temporary workers during this time.

6. 0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
No of self-employed
No of independent professionals
Growth of flexible workforce
Source: IPSE, 2015

7. Benefits of hiring contractors
Reduced costs
Allows your permanent
staff to concentrate on
the core business
Contractors are
responsible for their
own permits and
professional licenses.
Can bring in heightened
knowledge
Staffing Flexibility -
Support peaks in work
and fluctuating demand
No employment
responsibilities
Increased efficiency –
no training required
Reduce exposure
to lawsuits
Can often begin work at
short notice
Ability to gain
specialist skills

8. Ways of working?

9. Increasing Legislation
1998 2000 20162003 2010 2012 2014
IR35
Conduct
Regulations
AWR
Anti Bribery
Auto Enrole
Req Assurance
Reporting
Req
Umbrella
T&S
WTD
2007
MSC
??
IR35
reform

10. The Supply Chain

11. IR35 Reform
Points to note:
• HMRC believes non-compliance is costing £430m a year in tax and NI.
• HMRC issued a discussion document in July on options to reform IR35 .
• HMRC proposed changes included:
- change the IR35 test to focus on Supervision, Direction or Control.
- liability for non-compliance to sit with recruiters and / or end client.
• Opposition from stakeholders inc. REC, APSCO, FCSA, Law Society and CBI.
• Impacts if proposals go ahead:
- Recruiters will need to manage the IR35 status of their candidates .
- Recruiters should ensure they have a compliant PSL for
accountancy providers who offer a robust IR35 service.
Client Agency
Service
Provider Worker

12. Bribery Act
Points to note:
• Everyone needs to comply
• Criminal liability
• Ensure adequate processes and enforcement in place
Client Agency
Service
Provider
Worker

13. Required Assurance
Points to note:
• Targets off-payroll workers within the public sector
• Fines for departments who get this wrong
• Service providers can support compliance

14. Reporting Requirements
Points to note:
• Risk lies with agency
• Agency now has additional reporting responsibilities
• First report should have been filed
• Penalties for missed/incomplete reports
• Data protection in gathering information

15. Travel & Subsistence
Points to note:
• HMRC Consultation to restrict T&S closed 30 September
• Draft legislation expected in the Autumn Statement (25 Nov)
• Changes expected from April 2016
• We expect removal of T&S relief for Umbrellas
• Liability may sit with the recruiter and / or end client

16. Final thoughts….
• Growing flexible workforce which is crucial to the
UK economy.
• Increasing amount of legislation impacting those in
the supply chain.
• HMRC admit they don’t have the resources to
manage compliance – they are “up streaming”
compliance to recruiters and possibly end clients.
• Important that those in the supply chain work
closely together to manage risk and ensure
compliance.
• www.brookson.co.uk/agency_guide