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Latest in the Region: Philippines

Almost 50,000 ‘mini umbrella’ companies have been created in the past five years as a way of avoiding hirers’ national insurance liabilities, according to a BBC investigation.

The File on 4 programme’s probe found that these mini-umbrella companies, or MUCs, were even being used for workers in Covid test centres run by G4S.

The MUCs are set up to exploit the government’s Employment Allo

wance, which allows companies to claim National Insurance discounts of up to £4,000 per year as an incentive to take on more workers.

Usually, employers have to pay 13.8% in NI contributions on employee earnings if they earn more than £170 per week.

Some recruitment agencies are employing large numbers of workers through a series of MUCs – as each one has only a small number of employees, it is able to benefit from the NI discount and NI is avoided for all these workers.

Typically, the MUC provider sets up a UK company with British directors, who resign shortly after incorporation and are replaced by foreign directors, making it difficult for HMRC to pursue the company.

According to the BBC investigation, the majority of these foreign directors are based in the Philippines, with some 40,000 Filipinos recruited via Facebook and word of mouth.

“It is a fraudulent employment model that presents an organised crime threat to the UK Exchequer costing ‘hundreds of millions of pounds’ in lost taxes,” commented Clarke Bowles​, Director of Strategic Sales at Parasol Group.

“As a fully compliant umbrella company, it is disappointing that non-compliant models are still operating in our industry. Once again highlighting the urgent need for regulation, something ourselves and others have been pushing for over the last few years. Regulation is the best way to prevent abuse of the tax system and to protect worker rights.”

Often workers are unaware they are involved in such schemes. The BBC report included one employee working at a Covid testing site run by G4S who didn’t know anything about the MUC paying him until he received his first payslip and noted that neither G4S nor the agency that hired him were listed.

Instead, he appeared to have been paid by a newly formed company with a director in the Philippines. In response to the investigation, G4S said when the matter came to its attention HMRC had been notified.

Is ignorance a defence?

While it is perhaps understandable that workers could be duped into working via such companies, Phil Pluck, chief executive of the Freelancer & Contractor Services Association (FCSA), questioned whether or not employers and agencies could claim to have been similarly innocent.

“Some of the examples illustrated show MUCs that were only a month old and had directors in the Philippines. It does beg the question; what due diligence did the end hirers and recruitment agencies actually do before sending contractors in the direction of these crooks?

“Clearly, we still need to help educate much of the supply chain and the contractor. FCSA and its members have produced several guides to help steer both companies and contractors away from unlawful players who are NOT umbrella firms but simply using that model as a means to steal from contractors and UK government.”

HMRC has been warning about MUC abuse since 2015, and issued new advice this week following the BBC report.

It said that business models for MUCs were constantly evolving, but that unusual company names with unrelated business activity and foreign national directors were just a few of the things companies should look out for.

It also warned: “Every business which either places or uses temporary labour should be aware of the potential dangers posed to their business by mini umbrella company fraud in their supply chain.

“Not only can a fraudulent supply chain lead to reputational and financial damage to your business, but your workers may not receive all they’re entitled to.”

The last point is an important one, agreed Bowles. “Predominantly the headlines in the press recently are about loss in tax, however workers who are moved around frequently don’t know who to look to for their employment rights such as sick pay or maternity/paternity, they may not qualify for autoenrollment pension or qualify for week 12 worker rights due to the frequency of movement.”

Photo courtesy of Canva.com

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Talent Solutions

TALiNT Partners and Stratigens are proud to announce a strategic partnership which will provide an unparalleled range of talent intelligence solutions to the needs of our members, partners and clients.

Alison Ettridge, CEO of Stratigens said “Companies do research on their customers, their markets and their competitors to inform decisions all the time. With Stratigens, they can now do research on the greatest asset –access to the workforce and people they need to deliver their strategy. Our partnership with TALiNT Partners will support our mission of putting human capital at the heart of business decision making. We are really excited about working with the team to overlay the insight that TALiNT Partners’ network brings with labour market data to empower HR, TA and business leaders to make critical strategic decisions.”

Ken Brotherston, CEO of TALiNT Partners added “for some time we have been looking for a partner to support the insight generated by our network with global workplace data to bring a unique offering to the market. Stratigens is the perfect partner to help us achieve this and together we look forward to continuing to help raise capability in how employers find and keep the people they need, and how staffing and talent solutions providers can better support their clients.”

About Stratigens

Stratigens software is helping the world’s best companies make smarter decisions about where to grow, who to hire from and the diversity of their workforce. We join the dots between the labour market, economics and locations. Putting human capital intelligence at the heart of decision making.

We live in a world rich with skills and geo economic data, but the data is messy, unstructured, big and in thousands of places. Stratigens uses the latest in machine learning and big data to gather, extract, categorise and label the data, and put it into a format that’s easy to digest. So our clients can make smarter, faster, more informed decisions.

Stratigens – https://www.stratigens.com

About TALiNT Partners

TALiNT Partners connects the talent ecosystem. We bring together a global network of leading employers and solution providers to make better talent and technology decisions. Providing intelligence, insight and peer-to-peer networking that drives quality, innovation and improves inclusion across the talent ecosystem

TALiNT Partners – https://talintpartners.com/


If you would like to know more about the partnership, please contact Ken Brotherston, CEO of TALiNT Partners, ken@talintpartners.com

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Acquisition strengthens Nash Squared as a major MSP

Nash Squared, a provider of talent and technology solutions, has become a major force in Managed Service Provision with its recent acquisition of Het Flexhuis – a Managed Service Provider (MSP) of talent and recruitment services based in The Netherlands.

Het Flexhuis has a strong track record in delivering outsourced recruitment services for government, public services, and commercial organisations and will operate as an independent brand within Nash Squared’s recruitment business Harvey Nash.

Bev White, CEO of Nash Squared, commented: “I am delighted to welcome Het Flexhuis into the Nash Squared family. It is our vision to help our clients access talent and technology in every way possible, and offering a high quality MSP solution is an important next step for us. Het Flexhuis brings enormous experience and expertise with them, and I am excited by the potential.”

Occo Lijding, MD of Harvey Nash The Netherlands, commented: “This represents a step change in how we can help and support our clients in talent and technology. I have long admired the team at Het Flexhuis, and when we met I was struck by how similar our values and ambitions were. They are the perfect fit for us, and I look forward to working with them.”

Frederieke Schmidt Crans, Managing Director, Het Flexhuis commented: “We are thrilled and excited to become part of Nash Squared. Our company was established ten years ago with a mission to create a world-class MSP with great people and processes at its core. We see joining Nash Squared as the natural next chapter in that success story.”

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Search engines combine forces to accelerate Adzuna’s growth in the US

On Tuesday, 14 June, Adzuna announced their acquisition of the US job search engine Getwork.

The Getwork team, under the leadership of Brad Squibb, will be working alongside the Adzuna team, intending to accelerate Adzuna’s growth in North America.

Getwork links job seekers with vacant roles at North American companies by indexing millions of verified jobs daily directly from tens of thousands of employer career sites.

Adzuna, with headquarters in London, UK, Indianapolis, IN, and Sydney, AU, uses AI-powered technology to match people to jobs. The company has recently launched in Switzerland, Belgium, Spain, and Mexico. Their operations now cover 20 markets globally.

The two companies will operate as independent brands with their own established communities.

Doug Monro, CEO, and Co-founder of Adzuna, comments: “Adzuna acquiring Getwork will help us supercharge our growth in North America. The Getwork team’s stellar reputation for great service and delivery has led them to be trusted by an impressive roster of household name companies in the US. It’s also a great fit as their team and mission are so aligned with ours. The US enterprise market is crying out for strong alternatives to existing offerings and we’re looking forward to combining Adzuna’s marketing expertise, global footprint and programmatic job matching technology with Getwork’s deep industry knowledge and reputation to deliver even better for our customers. The US is the fastest-growing part of our business and this acquisition will accelerate our profitable growth trajectory.”

Brad Squibb, President of Getwork, comments: “Adzuna is a truly global business, operating across 20 countries, which creates an exciting opportunity for us to scale into new markets with the help of a brand that has already paved the way for international expansion. We can’t wait to join Doug and the team on this journey.”


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Despite efforts there is still massive room for improvement in UK management and reporting

In research released today, findings reveal a lack of focus on progressing diversity in the workplace. In the study conducted by SD Worx, it was found that while 68% of UK companies are committed to removing unconscious bias in the recruitment process, many have failed to implement a reporting system to track progress on meeting ED&I objectives.

The survey revealed that only 26% of UK companies evaluate managerial commitment to achieving ED&I-related objectives. A further 32% admitted having no systems allowing employees to report discrimination.

The UK ranked third in its commitment to removing unconscious bias at 68% when it comes to ranking. Ireland ranked first at 74%, with Belgium coming in second, at 69%.

As far as rankings for equal access to training, the UK is slightly lower than other countries, with 64% of companies investing in equal access to training and development. Ireland (72%), Belgium (71%), and Poland (69%) topped the list.

While 64% of UK companies include transparency about ED&I goals and actions to attract a diverse workforce in their mission statement and corporate values, only 60% of the UK companies surveyed said that they promote ED&I in job advertisements, social media, and their websites.

The survey also revealed that countries vary in their level of focus concerning educating and involving managers in their ED&I policies. For example, in the UK, 60% of companies stated that they actively involve their managers in ED&I policies, and 60% provide internal training on the topic.

Colette Philp, UK HR Country Lead at SD Worx commented: “It’s no longer enough for businesses to say they prioritise diversity and inclusion. Instead, they must prove their commitment to achieving a more diverse workforce, both internally within their business and externally to attract talent.”

“There is more awareness than ever before regarding diversity in the workplace and it’s a deciding factor for many when it comes to searching for a role or staying with a business. A diverse workforce brings new experiences and perspectives and an inclusive environment allows individuals to thrive. If businesses aren’t already putting ED&I as a top priority, it’s essential they act now to do so.”

Jurgen Dejonghe, Portfolio Manager SD Worx Insights, added: “It’s important that companies start investing in an active reporting system about their actions concerning diversity, equality and inclusion. On the one hand, that data offers a strong basis for optimising the diversity policy with concrete and consciously controlled actions. On the other hand, such a system also provides clear evidence whether companies are effectively putting their money where their mouth is and not making false promises to (future) employees.”

For ED&I initiatives to be successful, change needs to come from the top, with proper rollouts and reporting system to track their progress.

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