According to one of the speakers at an event for umbrella companies, payroll providers and recruiters, the government is so sick of poor employment practices that organisations at the head of the supply chain will be made to accept some responsibility.

Speaking at a seminar on The Future of Payroll Tech & Services, co-hosted by business services outsourcing provider QX and recruitment industry payroll software company Solutio in London, Julia Kermode, CEO of the FCSA, said: “Government is so sick of there being supply chains, where there might be poor practices further down the line that they are thinking of making the head of the supply chain have some responsibility for compliance within the supply chain. 

“If it comes about – and I actually think it will – that will be really positive,” added Kermode.

Citing the example of Sports Direct, she said that headlines a few years ago about its poor employment practices “quite apart from damaging its reputation had also had a very real impact on the financial part of the company”.

Kermode said that her dealings with BEIS (Department for Business, Energy & Industrial Strategy), indicated that if joint responsibility didn’t work the government would be prepared to go further. “There is talk that if joint responsibility doesn’t resolve the issue that the government might make it a joint liability [with others in the supply chain], which would mean that the heads of the supply chain would have a cost issue as well.”

In his presentation, Jonathan Brostrom, principal consultant at 1218 Global, predicted that contingent and project-orientated contract and freelance work “will continue to increase as a percentage of total work”. However, he continued: “The primary actors are still going to be staffing firms, including umbrella firms, customers and workers – it’s a three-sided transaction.

“Advances in technology drive changes in how these firms work, so they maybe even alter or eliminate the role of the staffing firms in some cases.” He said this was one of the goals of some of the disintermediation companies. They took the view, ‘My software is so good you don’t need a recruiter.’ “Sometimes that will work,” he added.

David Bell, co-founder of Solutio, and the company’s CEO for Asia, talked about how technological innovation was changing the market. And he outlined how Solutio was using advances in technology “to service the workers far better”. This included on-demand payroll, as well as the ability to notify a worker that they will be paid in one hour. “That is a very powerful concept,” he said. Self-service, using the company’s mobile app was already improving the customer experience, he said.

Data analytics also had the potential to provide umbrella companies with important information, said Bell, answering the questions such as how likely it is that a worker will leave an umbrella company. Bell said in the future he saw at some point temporary and permanent coming together with workers such as NHS nurses, who also working through agencies, managing their work through a single app.

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