With the amount of legislation and paperwork required of all companies, not just those in the recruitment sector, business leaders and senior managers can be forgiven for an aversion to admin. However, although often laborious and sometimes challenging for those without a legal background, stringent attention to legal compliance is one of the best ways to ensure business continuity, happy clients and candidates and ultimately, company success.
Generate’s experienced payroll and contractor management specialists outline the importance of legal compliance in recruitment, and the five ways that staffing agencies can ensure compliance throughout the hiring process and beyond.
Why are Compliant Recruitment Processes Important?
Legally sound practices are the best possible solution to support recruiters, clients and candidates alike:
- Protect Human Rights – Complying with the UK’s Modern Slavery Act and UN’s Dhaka Principles for Migration with Dignity prioritises the health and safety of every candidate. Particularly important for recruiters who source temporary workers from one area of the world and transport them to another, for example from the Philippines to the United Arab Emirates, following the highest standard of legal practices provides candidates with the quality of working environment, accommodation and lifestyle that they need to be effective in their roles and enjoy good physical and mental wellbeing.
- Reduce Risk of Fines – Employers who are found to illegally underpay, neglect or mistreat their staff face multiple £millions in fines (in addition to prison sentences for executives) and depending on the circumstances of employment, some staffing agencies could also be liable.
- Avoid Permanent Brand Damage – Negative PR associated with tax fraud cases or human rights abuses can ruin decades spent building an excellent business reputation. Customers are increasingly aligning their purchasing behaviour with their own values, meaning they will simply stop buying products from companies they don’t see as ethical or trustworthy. Potential employees and candidates may be deterred from working with your company due to a negative brand image in the market that could last years.
How Can Recruitment Agencies Ensure Compliant Processes?
1. Awareness and Regular Review
As always, understanding the problem is the first step to creating the solution. Recruitment agencies will need to consider the role of everyone in the business, not just the Legal and Finance teams. Conduct a full review of your current position to find out which areas need to improve, including:
- Systems – How and where does your company store data such as candidate qualifications, passport copies and right to work documentation? Can the authorised individuals access the data they need when they need it, and is sensitive data protected?
- People – Are your whole team aware of the responsibilities of the business and their department? For example, the Marketing team must abide by GDPR regulation when sending email campaigns, and Sales must run the correct background checks and receive the correct documentation specific to each of their roles.
- Processes – Do you have rigorous processes that cover every area of your business? Are these always implemented correctly, are they checked, and could they be improved?
Start with a full review to address any and all gaps. Put together a cross-departmental team with responsibilities for regularly researching, reviewing and reporting on relevant legal changes, which can then be regularly discussed with senior management and timely improvements implemented.
2. Make Compliance a Habit
After conducting your initial review, start keeping official records of every regular review meeting and the actions implemented from each one. Accurate record-keeping is vital in understanding why and how problems arise, and identifying and addressing the root cause.
Set up training programmes for all employees, tailored to the job roles of each, to ensure all departments at all levels understand the importance of compliance and their relevant responsibilities. Take individuals through which information needs to be entered into which system and how records should be stored and maintained, to provide the most accurate picture of a problem or situation whenever needed, and follow up with refresher training regularly to dramatically reduce the risk of human error.
Whilst recruiters are naturally people-oriented individuals rather than fans of admin, once they understand the reasons behind compliance processes and have seen these practices championed by business leaders and team managers, staffing teams can become vital supporters of compliant recruitment processes.
Continuous communication inside and outside the business will proactively identify any lapses in compliance before they happen, and will enable you to rectify problems as quickly as possible. Internal communication between Sales and Back Office is essential to ensure candidates are properly screened and submitted, and can be achieved through regular meetings, process improvements and dedicating specific Finance and Legal Officers to individual Sales teams and consultants.
Most recruiters are excellent at keeping in touch with clients and serving their needs, but candidates are often an afterthought once they’ve been hired and have finished onboarding. Providing emergency contact details, conducting exit interviews and sending regular surveys where contractors can anonymously report mistreatment will help recruiters see a full 360 view of client workplaces, ensuring that the agency can act if non-compliant or unethical practices exist in their supply chain.
4. Work with a Compliant Contractor Management Supplier
The right supplier can prevent fines, brand damage and heavy admin burdens, in favour of efficient, reliable and legally sound recruitment practices. Experienced payroll specialists will understand the details of tax, national insurance, take-home pay, pensions, sickness and holiday pay, and will be the best port of call when navigating unprecedented situations such as the furlough pay introduced by the Covid-19 pandemic. Generate’s 100% compliant payroll solutions provide piece of mind for staffing agency owners and your consultants, leaving you to focus on recruiting.
Find a Compliant Contractor Management Provider
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