Umbrella Company Employees who rely on recruitment companies to source new contracting assignments may well endorse recent comments by REC chief executive Kevin Green, who urged recruiters to change their businesses model or face extinction.

Mr Green was speaking at the recent Recruitment Conference in London and warned that, as the economy recovers, recruitment companies could no longer operate as they did prior to the economic meltdown of 2008. He said: “Traditional recruiters will struggle in the future, so they must fundamentally change the way they operate. They must focus on SMEs and locality, start to build relationships with them and not on big corporates or the public sector. You must start to put a lot of eggs in a lot of baskets. There needs to be a relentless focus on intermediaries and also consolidate your operations to one main site to save on unnecessary overhead costs.”

His advice to recruiters to place a “relentless focus on intermediaries” suggests that Mr Green is aware that the UK faces an acute talent shortage: intermediaries as such as Umbrella Companies are an excellent source of skilled professionals; therefore, it would make sense for recruiters to cultivate strong relationships with them.

Mr Green also highlighted a major shift in attitudes amongst younger people. In 1991, he noted, just 17% of the workforce was self-employed or freelancing. Today this figure stands at 83%, with 46% working in flexible or non-permanent roles. Sourcing skilled freelance talent could create “real issues” for companies experiencing skills shortages, he said.

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