Reviewing Your PSLs
by on December 22, 2022
January is a great time to look back at your achievements over the last twelve months, and look ahead to what the New Year will bring.
One really important thing you can do to ensure your continued prosperity over the coming year is to review your Preferred Supplier Lists (PSLs), to ensure that the umbrella companies you deal with are compliant and providing the best possible service to both you and your contractors.
Here, we look at what you can do to freshen up your list.
Why are PSLs so important?
Recruitment agencies have PSLs for every aspect of their business – who supplies their stationery, what local café makes the best sandwiches, and most importantly, which umbrella companies they recommend to their contractors and to handle their payroll functions.
But, as with most things in life, not every supplier is of consistent quality, and opting for one umbrella company over another can have serious consequences for contractors and recruiters alike.
Reviewing your agency’s PSL will help focus your mind on what’s important to your company. Perhaps you place great importance on Diversity and Inclusion (D&I), are committed to sustainable working practices, are concerned about GDPR, or simply won’t entertain an umbrella provider whose compliance has lapsed? By aligning the suppliers on your PSL with your own values, you can drive your company’s ambitions and performance forward in the new year with confidence.
PSLs give you an immediate and consistent reference point for the umbrella companies that you can recommend to your contractors, as well as ones that you can entrust your payroll services to. It’s a huge responsibility and one that needs to be right first time.
How to do it
A great place to start is to list the umbrella companies you deal with, and check them individually with Companies House.
This will give you an overview of the health of the company’s finances, a list of directors, and other relevant information to ensure you can make an informed decision about whether they will be able to fulfil their financial obligations during the coming twelve months.
Next, check that they are still FCSA accredited to ensure they are fully compliant with the highest possible standards, in order to minimise risk both to your agency and to your contractors.
It’s a good idea to evaluate your own organisation’s performance during this review process, too. Has the number of clients you deal with increased? Are you placing higher numbers of contractors than you were this time last year? If circumstances have changed, it gives you an opportunity to discuss changes in service agreements with your umbrella provider to meet new demand.
It is also worth considering if the service you receive from your umbrella companies has changed substantially over the last year. If standards have fallen and you’ve received complaints from the contractors you deal with, or you’re not satisfied with the levels of service, it’s time to think about moving on and finding a more reliable provider.
There has been some extremely bad press surrounding the umbrella industry over the last year – most of it involving unethical and illegal practices from a minority of providers. If your recruitment agency has involvement with any of the disreputable companies concerned, your first course of action must be to disassociate yourselves with them to avoid tarnishing your brand with their behaviour.
Remember that your agency is criminally liable for ensuring that none of your contractors are involved in tax-evasion, and it’s your responsibility to make sure that all the umbrella companies you deal with are fully compliant with the latest guidance from HMRC.
This includes looking out for things such as offshore payments and disguised remuneration – ethical umbrella companies will provide training in good practice for your recruitment consultants, so that they understand the legalities surrounding these difficult areas.
Finally, think about the actual people you deal with at your umbrella companies. Is there a dedicated and knowledgeable team available to answer any questions you may have or any concerns you wish to raise on behalf of your contractors or colleagues?
Routine annual ‘housekeeping’ tasks like reviewing your PSLs might seem onerous and time-consuming, especially at the beginning of a busy and challenging year ahead. However, if you factor in the advantages that such a procedure has and make it part of your annual regular practice, you’ll notice the benefits in terms of how your agency is perceived, as well as continuing to provide the best possible service for your contractors.