Working with recruitment agencies that operate on a global scale is all about finding solutions. Often, we get asked whether we have an umbrella solution in ABC country, as the UK market is very familiar with the umbrella company model.
While the umbrella model is flexible, efficient, and easy to use, it’s also quite unique to the UK. People may disagree, but from a temporary worker payment perspective, the UK is leaps and bounds ahead of many countries. In some ways, the way we operate in the UK is also more commercially minded than elsewhere.
So, what’s the difference? Sticking with the EU for comparison, the umbrella payroll model generally doesn’t exist—and where it does, it’s far from a carbon copy. France is by far the closest to the UK model, particularly in the way contractors can be processed on a timesheet basis with hourly, daily, or monthly rates. However, it still includes a few additional requirements around contractor termination and restrictions on the types of roles it can support.
Outside of this, the main challenge is that governments have, over the past 5–10 years, made significant changes to local employment models to ensure temporary workers are treated the same as permanent employees. This has introduced longer notice periods, guaranteed hours, severance pay, and in some cases, restrictions preventing an employing company from leasing out a worker altogether.
Now, I’m all for removing the mistreatment of temporary workers, but these legislative changes have knock-on effects across all scenarios—not just the ones that genuinely require greater protection. In some cases, they’ve removed the ability for an agency to employ temporary workers locally on a timesheet basis, leaving only a traditional monthly salary route. This isn’t always financially viable for the agency or its client.
Flexible workforces are the backbone of many sectors—especially engineering and tech—where project costs are tightly managed. Without an umbrella-type model, agencies and clients are forced to look at alternatives such as self-employment, local limited companies, posting of workers, or sometimes no viable solution at all. While all but one of these routes can work (with proper qualification), they do move contractors away from employment models, which is counterintuitive given the recent legislative push toward employment protection.
I suppose my message to agencies is this: choose a partner who understands both the client’s needs and the solutions available. This is key to making placements and earning commission, sorry, growth (all about the growth). The solution you want may not be the right one—but there is always a solution available. Just remember, umbrella payroll may not be available where you need it.
Kris Simpson, Head of International
