Ask the experts – what areas of compliance tend to get overlooked?
Every month an industry expert addresses a recruitment issue. Here, John Randall, engagement director, Standards in Recruitment addresses other compliance issues.
Q: What areas of compliance tend to get overlooked?
Whatever the size of your recruitment business it’s important that you operate within the relevant legislation. Compliance management is about sound business practice and makes good commercial sense as it reflects the rules of engagement that your clients and candidates expect.
Sometimes however, it’s easy to overlook obvious yet important processes. For example, when entering into business relationship with a third party, are you sure you know who you are dealing with?
Failing to identify the correct contractual party can be fatal to the enforcement of contractual terms and can create real problems further down the line. For example, a contract with company A may not protect you if your introduction of a candidate has been made to company B.
Checking the name can be particularly important when dealing with large company groups that often use trading names across different company lines or use the word ‘group’ to cover any company within the group.
Once a dispute arises, for example where a fee is due and not paid or there is a breach of some contract term, it doesn’t help if the name shown is not a real legal entity or that no name has been entered into the documentation, maybe just the words ‘to be confirmed’ have been used. This not only can cause serious difficulties when trying to enforce but also result in regulatory problems that can come back and bite you.
To address this: always check the actual name of the company you are dealing with at Companies House, or if the word ‘limited’ does not appear in the name you are given check the full name and whether it is a business that is not a company, e.g. a partnership or sole trader. Check credit ratings and links to other companies. Train your staff on the importance of establishing identity, so you do not lose out.
Whether or not accreditation is seen as important, every managing director and investor wants their recruitment business to be successful, and will be aware that compliance is relevant. The ultimate goal – full compliance – may seem to be out of reach or be unnecessary or be just regarded as an administrative burden. However, the most successful companies have always recognised the role that compliance plays across the board.
The Standards in Recruitment (SiR) programme is all about helping recruitment businesses achieve good business practice as painlessly and cost effectively as possible. As well as addressing the regulatory aspects of recruitment the Standards themselves reflect the rules of engagement that your clients and candidates expect, effectively working as a blueprint for you to use to your advantage.
Compliance good practice
The above example of identity checking is just one issue featured in a free compliance tips guide, produced by Standards in Recruitment (SiR). The guide entitled ‘Six of the most commonly overlooked compliance procedures’, provides examples that recruitment businesses will recognise and for each, outlines a typical scenario and concludes with how they can be addressed. Other topics include:
- putting contractual terms in place with clients
- how to make a company opt out valid
- registering with the Information Commissioner’s Office
- checking a candidate’s right to work, and
- including correct company information on your website.
The article was first published online in The Global Recruiter on 26th April 2016