Your organisation may be at significant risk if you do not audit your agency labour providers.
For large employers, it is common to use numerous recruitment agencies to supply their temporary workers. It's important to note that these agencies are representing their brand correctly when engaging agency workers.
If managed incorrectly, companies may be at risk of significantly damaging their brand and they may even end up in the press like BooHoo recently.
But, how can companies ensure they stay legally compliant?
1: Manage this process internally – this would involve direct and regular communications including auditing your agencies. Dependent on the number of agencies involved, this could mean a dedicated person or team to educate, train and audit.
2: Outsource the audit process – arrange an external audit with an RPO agency management specialist who will visit each supplier, audit them, and report back any non-conformances.
An RPO supplier will also be able to report back on the following areas:
a:) Pre-employment checks and candidate registration forms
Checking candidate registration documents against which include areas such as 48-hour working and unspent convictions including checks on the date that the forms were completed.
b:) Employment terms and conditions
Ensuring all workers have signed employment terms and conditions that are appropriate to the way in which they have been engaged, via an employment business.
c:) Payslip checks
Checking payslips for each worker to ensure that workers are being paid the National Minimum/Living Wage or in line with the market rate for their role. Viewing the payslip also enables confirmation of the type of scheme a worker is being paid through and whether or not this is compliant and appropriate for the type of work being undertaken.
d:) Right to Work documentation
It is a legal requirement to make appropriate Right to Work checks in line with UK Visa and Immigration guidelines. All Right to Work documents (such as passports and birth certificates) should be held on file and have easy access.
3: Appoint an RPO outsourcing specialist – If you are a high-volume employer that uses multiple agencies from across the country, then a recruitment process outsourcing specialist (RPO) will be able to standardise the engagement experience to ensure agency workers view your business in a positive light, and have the best possible experience consistent with your own brand values.
An RPO agency will also be able to deliver many more benefits which include:
Online management of the entire recruitment process, from order to invoice, that deliver real-time management information and reporting across your entire business
Measurement of agencies through tailored Service Level Agreements, quarterly reviews and feedback, and benchmark their performance against the supply chain
Systems to manage Rights to Work in the UK and tenure, in line with Agency Workers Regulations. This also includes audit agencies and agency worker records every six months
Direct cost savings of between 6% and 12% for temporary labour and up to 35% for permanent, by standardising pay rates and margins and stopping overcharging on Employers National Insurance and Holiday Pay
Agencies based on your existing suppliers, taking into account process, financial stability, geographic capability and legal compliance. If there is a lack of suppliers, we suggest new ones we trust
Standardise engagement experience to ensure agency workers view your business in a positive light, and have the best possible experience, consistent with your own brand values
So, how can hiring managers and recruitment agencies get better results with recruitment agency audits?
Recruitment agency audits are necessary to ensure that you are not only achieving what your organisation demands in terms of hiring, but also that the process is legally compliant. This helps hiring managers have a good reputation in their organisation as well as with third parties.
With a more efficient and cost-effective recruitment strategy, your operation will be more efficient.
Ideally you should also conduct background checks on your recruitment agencies to ensure that you are not being overcharged.
A recruitment agency audit is an important aspect of your recruitment process for agency workers.