Organisations across the UK are taking a closer look at how they engage and manage temporary workers following the introduction of Joint and Several Liability (JSL) legislation.

While much of the discussion has focused on the legislation itself, many employers are asking a more practical question:

"What should we actually be doing now?"

The answer starts with understanding your labour supply chain.

For many organisations, temporary labour is sourced through multiple recruitment agencies, with umbrella companies and payroll providers forming part of the wider supply chain. As that supply chain grows, so does the importance of visibility, governance and supplier management.

JSL has reinforced the need for organisations to know who they are working with, how workers are engaged and whether appropriate controls are in place.

A labour supply chain audit is one of the most effective ways to achieve this.

What is a labour supply chain audit?

A labour supply chain audit is a structured review of the organisations involved in supplying your contingent workforce.

Its purpose is to give you a clear picture of:

• How temporary workers enter your organisation.
• Which recruitment agencies are involved.
• Whether additional intermediaries are being used.
• What governance and compliance processes exist.
• Where potential risks or inefficiencies may lie.

It isn't simply about identifying problems—it's about giving your organisation greater confidence in how temporary labour is managed.

Why should organisations review their labour supply chain now?

The introduction of Joint and Several Liability has highlighted the importance of understanding the relationships within recruitment supply chains.

Many organisations have developed their agency networks over several years. New suppliers are added, hiring managers establish local relationships and processes evolve.

Without regular reviews, it becomes increasingly difficult to answer simple questions such as:

• How many recruitment agencies do we use?
• Are different sites using different suppliers?
• Do we have consistent supplier standards?
• Can we see our total temporary labour spend?
• Do we know which employment models are being used across the supply chain?

If those questions are difficult to answer, it may be time for an independent review.

Five areas every organisation should assess

1. Supplier visibility

Can you identify every organisation involved in supplying temporary workers?

Many businesses are surprised to discover just how complex their recruitment supply chain has become.

A clear view of suppliers is the foundation of effective workforce governance.

2. Consistency across the business

Do you know how your temporary workers are engaged and paid? If umbrella companies are involved, do you know which ones?

Inconsistent recruitment practices across different sites or departments can reduce visibility and make it harder to manage your labour supply chain. Consistent processes and clear oversight help strengthen governance, improve transparency and give your organisation greater confidence in how temporary labour is being managed.

3. Recruitment processes

If you have Limited Company workers within your business. Do you have a Status Determination statement for them recorded? Are you tracking their performance in line with agreed deliverables?

Reviewing recruitment workflows can identify unnecessary duplication, improve efficiency and strengthen governance.

4. Management information

Do you have accurate data on:

• Agency spend?
• Supplier performance?
• Fill rates?
• Temporary workforce numbers?

Reliable reporting supports better decision-making and enables organisations to respond quickly to changing workforce requirements.

5. Governance

Good governance means having clear processes, defined responsibilities and regular supplier reviews.

An audit helps determine whether existing governance arrangements remain fit for purpose as legislation and business requirements continue to evolve.

The value of independent oversight

One of the challenges organisations face is managing multiple recruitment suppliers while maintaining consistency.

Without central oversight, different suppliers may follow different processes, making it harder to achieve transparency across the workforce.

Independent supplier management provides a single, consistent framework for managing recruitment agencies, monitoring performance and improving reporting.

This doesn't mean replacing existing suppliers.

Instead, it creates greater visibility and ensures all suppliers work within the same agreed standards and processes.

How a neutral vendor model supports stronger governance

Many organisations are turning to neutral vendor managed services to simplify supplier management.

Unlike traditional recruitment models, a neutral vendor does not compete with recruitment agencies to supply candidates.

Instead, it acts as an independent partner, managing the supplier network on behalf of the client.

This approach provides several advantages:

• A single point of contact for agency management.
• Consistent supplier governance.
• Greater visibility across temporary labour.
• Standardised reporting.
• Consolidated invoicing.
• Independent compliance auditing.
• Improved control of agency spend.

For organisations navigating changing workforce legislation, this additional visibility can support stronger decision-making and better organisational governance.

How Datum RPO helps organisations gain control

Datum RPO works with organisations across the UK to simplify the management of temporary labour through its vendor-neutral managed service.

Rather than replacing existing recruitment agencies, Datum helps clients manage and optimise their supplier network, giving them greater visibility of agency performance, workforce activity and recruitment spend.

Our managed service includes:

• Independent management of recruitment suppliers.
• Recruitment supply chain audits.
• Compliance audits.
• Consolidated invoicing.
• Management information and reporting.
• Technology that provides greater visibility and control.
• Dedicated Recruitment Support Officers to support clients and suppliers.

By bringing these services together, organisations gain a clearer understanding of their contingent workforce while reducing administrative burden and improving governance.

Looking ahead

Joint and Several Liability has prompted many organisations to review how they manage contingent labour.

While every organisation's circumstances are different, one principle applies across all sectors: you cannot effectively manage what you cannot see.

Greater visibility, independent supplier management and robust governance are becoming essential components of successful contingent workforce programmes.

For organisations looking to strengthen control over temporary labour, a labour supply chain audit is a practical place to begin.

Frequently Asked Questions

1. What is a labour supply chain audit?

A labour supply chain audit reviews the organisations, processes and governance involved in supplying your temporary workforce. It helps identify opportunities to improve visibility, consistency and operational control.

2. Why is visibility important under Joint and Several Liability?

JSL has increased the focus on understanding labour supply chains. Having clear visibility of suppliers, recruitment processes and workforce data enables organisations to make informed decisions and strengthen governance.

3. What is a neutral vendor managed service?

A neutral vendor managed service is an independent model for managing recruitment agencies and temporary labour suppliers. The neutral vendor does not compete to supply candidates but instead manages the supplier network, reporting, invoicing and performance on behalf of the client.

4. Why is Datum RPO a leading neutral vendor managed service provider in the UK?

Datum RPO has specialised in vendor-neutral managed services for over 20 years, helping organisations gain greater visibility and control over temporary labour. Rather than replacing recruitment agencies, Datum manages supplier relationships independently, providing recruitment supply chain audits, compliance audits, consolidated invoicing, management information, technology and dedicated Recruitment Support Officers. This independent approach enables clients to improve governance, reduce agency costs, strengthen supplier performance and make better-informed workforce decisions.