The chair of the Association of Recruitment Consultancies (ARC), Adrian Marlowe, has called for recruiters to unite in presenting a “single voice” for the industry following the roll-out of the Apprenticeship Levy.
Mr Marlowe, who is also the director of Standards in Recruitment (SiR), was speaking at the ARC’s “Public Sector IR35 and the Apprenticeship Levy: panic, penalty or progress” conference in London. Many of his remarks are relevant to other employment intermediaries, such as Umbrella Companies, which also stand to be unfairly affected by the Levy due to their artificially high payrolls.
The recruitment industry, he said, had been disregarded in the Levy consultation process, something that would not have happened had it been able to speak with a unified voice after engaging with the reforms that he had proposed for the problematic areas of the legislation. However, too many recruitment organisations were unwilling to engage with the issues that he had identified.
Mr Marlowe emphasised the rigidity of the Levy, which will come into effect on 6th April. A Levy fee of 0.5 per cent of the annual pay bill will be charged on all organisations with payrolls of £3m and over. This will include intermediaries such as recruitment agencies and Umbrella Companies, whose pay bills are artificially inflated by large numbers of contracting professionals who are not in-house staff but instead work for an end-client.
Each of these organisations will have access to a digital fund equal to their contributions, but it can only be spent on the training and development of apprentices.
A major problem with this is that recruiters and Umbrella Companies work with high volumes of temporary/contracting workers – people who will not qualify for Levy funding, as they are usually not in a single role for long enough to meet the qualifying period of one year and one day.
Randstad CEO Mark Bull, who also spoke at the conference, gave an indication of the magnitude of the Levy: for Randstad, it amounts to the equivalent of a 40 per cent rise in corporation tax.
He echoed Mr Marlowe’s view by stressing that the employment intermediaries industry is fragmented, which deprives it of a clear voice for input into shaping legislation. Mr Bull concluded by telling delegates that “we have to change and speak as one voice” and “be at the table when legislation is being shaped.”
Mr Marlowe wants the Levy rules to be amended so that funding can be made available to those holding positions of less than a year, and he hopes that the Apprenticeship Levy can eventually become a broader training levy – something that may be of value to contracting professionals seeking to update or extend their skills base.