Umbrella companies play a vital role in the professional recruitment sector and our affiliate umbrella provider members pride themselves on the strong relationships that they have built and nurtured with their clients.

Recent reports in the recruitment press have suggested that umbrella companies may be competing with recruitment consultancies — but this is simply not the case. The Association of Professional Staffing Companies (APSCo) works exclusively within the professional staffing sector, so I am not able to pass comment on other areas of the recruitment industry. However, when we recently canvassed our umbrella members to determine how they perceived their relationship with the staffing sector, the response was overwhelming. They confirmed that they had absolutely no intention, now or in the foreseeable future, of competing with their recruitment company clients. While it is true that some of our members have over-arching employment contracts which require them to help contractors look for work, this activity goes no further than assisting them to review job boards and contacting previous recruitment companies with whom they have worked. 

Umbrella companies fulfil an important role within the professional staffing sector, and contractors turn to them to take advantage of legitimate travel and subsistence tax benefits, without the worry, cost and concern of running their own personal service companies.

APSCo takes extremely seriously the legal and ethical compliance of its umbrella company affiliate members and requires that they all undertake an external compliance review, which is carried out to an agreed level. Although compliance issues in this area are complex and best practice is constantly changing, APSCo endeavours through its compliance review and affiliate code of conduct to give its members a degree of comfort when working with an APSCo affiliate umbrella.  

So to be clear, APSCo affiliate umbrella companies only help place candidates as part of their obligation as an employer. Their success depends on an ability to work closely with recruitment consultancies. It is not in umbrellas’ interests to compete with or upset the staffing companies with whom they collaborate. Of course, there may be rare occasions where a contractor will find work directly with a client and in such cases an umbrella may contract directly with them — but these cases are rare.

We should not forget that the relationship between umbrellas and staffing companies is a valuable commodity. Many recruitment firms have preferred supplier lists of umbrellas and making it onto these lists is no easy feat. Umbrellas must provide a great deal of information regarding their compliance and working practices. Why on earth would umbrellas want to jeopardise these lucrative relationships? Furthermore, most recognise that running a recruitment business requires more than just a database of client contacts and contractors. 

Recruiters are highly-skilled professionals. Success depends on experience, expertise and the ability to understand your marketplace. Large databases are not the asset they were before the rise of the job board and LinkedIn. 

As far as I’m concerned, our umbrella company members provide a valuable and professional service to both candidates and the recruitment businesses. There is absolutely no evidence that our umbrella company members are breaching the confidentiality of their arrangements with, or of them deliberately setting themselves up in competition against, their recruitment company clients.

We must not underestimate the value of umbrella providers and the strength they bring in working alongside recruitment businesses to deliver holistic solutions for contractors.

Samantha Hurley, head of external relations, APSCo

• If you have a letter, email... [email protected]