You may be aware of international umbrellas/management companies (IUMC) offering country-specific, guaranteed services covering all employee-related costs and insurances for a standard management fee of circa 5% (naturally negotiable downwards to get your fixed-term assignment placements).
According to ItsInternational, the contracting market’s most experienced provider of ‘contract management services’, it doesn’t require a degree in ‘rocket science’ to realise this cannot be a sustainable IUMC business model. Conversely, such a deal for your candidates might win your favour initially because every recruiter naturally prefers their placements to pay low fees to the IUMC.
BUT, when claims over employer costs arrive up to a year after the assignment is over, the burden to settle seems to stay with the recruiters. Why is this? From telephone research recently conducted by ItsInternational with a number of recruitment agency Finance Directors, there are two popular reasons. Firstly, no recruiter wants to become embroiled in a fuss or have issues with a client; and, secondly, the recruiter may think the IUMC, left to its own devices, is more likely to make the problem worse rather than be smoothly resolved. Instead, the recruiter decides to take the settlement costs out of their margin rather than upset their client. ItsInternational wonders just how many recruiters reading this article have bothered pressing their IUMCs to live up to the indemnities originally promised.
In the same vein, IUMCs have been known to advertise “risk free” solutions. What agency would ever dare reject such an appealing and fail-safe offer? However, before rushing to get your hands on those solutions, ItsInternational suggests you obtain local and/or independent substantiation to be satisfied the promise is going to match reality. Such positive action on your part will help you better understand the level of risk you could be facing; and enable you to make preparations to manage that risk – whether it is a financial claim and/or reputational issue.
In support of all agency compliance personnel, ItsInternational would like every sales-driven director and consultant in every recruitment business to accept the old mantra “if it’s too good to be true, then it’s not likely to be true” when faced with solutions appearing to marry very high retentions with no apparent compliance risk.