With recent headlines, there is a need for Preferred Supplier Lists (PSL’s) but at what cost?
A contractor could demand that they continue to be paid through an umbrella that is not on an agencies PSL and that umbrella might not be compliant. The contractor may want to continue to use them as their take home pay is 85%+. In this instance, why should an agency want to use them?
There is also additional administration in setting them up, if they have not worked with them previously. Due diligence is absolutely required to add any supplier to your chain, especially with intermediary legislation and reporting. Nobody wants a big Tax bill if they get it wrong. All this administration comes at a cost somewhere and margins are tight with most agencies.
Some umbrellas might give agencies payment terms and therefore, with cashflow being king, will encourage a contractor to utilise a particular umbrella. If the margin is competitive, what is the issue?
Agencies could also be commanding £30,000 from each provider on their PSL, plus regular kickbacks and this just increases the margin that the contractor is paying. However, if this is all above board, the umbrella rate should encompass a percentage for the uplift in any case so the margin should be covered in full, whether it be £10 or £100. This is not the case in most circumstances.
A contractor is launching a petition against PSL’s. You can read the article in full here.
In this article, we particularly found the ‘Blood of an alpaca slain under a full moon’ paragraph amusing as we have seen this first hand. Another recruiter’s online post implies agencies themselves could be among those who ask EASI to intervene, even if their directors would then be foregoing future fitted kitchens. “Great news, you get a place on our PSL,” the post begins, sarcastically, and beginning to impersonate a rival, PSL-operating agent. “You just need to agree a few quick things first: 10% fee; 90-day payment terms; 12-month rebate. Oh, and the blood of an alpaca that was slain under a full moon. “Yes there are reasons, and no, we won’t discuss them. I trust that all works for you. So we’ll send over a 325-page document containing our terms, which you’ll return to us by tomorrow morning.”
Also in the headlines on a negative, there are some people cashing in on ‘placing contracts’ and one has been caught red handed. A former Coca-Cola Enterprises manager has admitted taking more than £1.5m in bribes in exchange for helping favoured companies win lucrative contracts. You can read the article in full here.
If you are looking at putting a compliant PSL together, to give your workers a balanced offering at competitive margins, contact us today ☎ 01252 863700 or email us