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Eight things to ask your suppliers of contract or temporary labour

24 May 2016

In today’s busy world, it’s becoming increasingly common for businesses to rely on temporary labour as it allows them to scale their workforce up or down as needed. If it is well managed and compliant, a temporary workforce can offer you unrivalled flexibility at great value for money – however, if it’s not properly managed, your temporary labour can become more of a hindrance, resulting in poor visibility, lack of control, unnecessary costs and potential compliance risks. It pays to be in control of your agencies, and a successful supply chain can be the key thing you need to unlock your potential. But before you decide which agencies to add to your supply list, there are a few important questions you need to ask...

1. How do you calculate holiday pay and national insurance?

It’s important to consider how agencies calculate things like holiday pay and national insurance to ensure that you are not being overcharged and that the worker is not being underpaid.

2. What margin is being applied?

You should always check what margin is being applied so you can make sure you aren’t being overcharged. Is the quote margin or mark up as a percentage or a fixed £ per hour rate? Margin is the higher of the two and could result in you spending more money than necessary. Fixed £ per hour are normally applied to lower pay rate positions.

3.What is the pay rate to the worker?

This is important to ensure that minimum wage or living wage is being applied, also to ensure that pay parity can be applied after the worker has been working for the qualifying period for Agency Workers Regulations (AWR).

4. Does any of your labour come from a subcontractor or 3rd party supplier?

Another important question as there might be some risks transferred back to your company if the 3rd party is not doing all the necessary compliance checks or making payments directly to workers.

Temporary Labour

5. How do you ensure you are compliant with current legislation, rights to work and AWR?

Although an obvious question, it is nonetheless incredibly important. After all, the last thing you want to happen is to end up in court or splashed across the newspapers for employing an illegal workforce.

6. What it the employment status of the workers that you provide?

 Are they Limited Company Contractors, PAYE, Umbrella or Sole Trader? This important to ensure that you are not put at any unnecessary employment risks and being aware of how workers are engaged is the first step.

7. How quickly do you pay your workers?

By finding out the turnaround time from time sheet submission to money hitting employees’ bank accounts you can make sure your temporary labour is paid quickly and on time so there are no nasty surprises or walkouts on payday.

8. What value added solutions can you propose?

It’s important to find out what else your agency can do for you to make sure you are getting the best from them. They might have some innovative solutions that could provide real benefit that you haven’t previously considered, which could result in a stronger and better working partnership.

If you use temporary labour as part of your recruitment strategy, it might just be worth enlisting the help of an RPO provider to ensure you stay in complete control at all times, helping you to reduce costs without compromising on quality. From real-time reporting and compliance checks to agency auditing, RPO can transform your recruiting and provide direct cost savings of 6-12%.

Download our guide to RPO today and see how it could revolutionise your recruitment process.

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