Model Practice

New PEO option launched by supplier.

Model Practice

UK & Europe

Industry supplier, People have launched a PEO model which, they say, helps recruiters focus on “the business of their business”. In the US the model has already proven to aid growth, quickly and sustainably. Under the model all workers are paid PAYE and are given access to a wide range of benefits. There is no need, therefore, to pass HMRC on-line tests. 

“In terms of the recruitment landscape we have been meeting dozens of CEO’s and the story seems to be the same,” comments Chairman, Suhail Mirza. "Political uncertainties aside the focus is on growth (amid tighter margins and increased competition) and also refining all internal process and systems to increase consultant productivity. Accordingly we are leading the launch of a PEO model for the UK market. This model, adapted from the US, is allowing UK recruiters to: 

  • attract and retain contractors,
  • differentiate themselves with end user hirers in both contingent and managed service contexts and,
  • drive process/systems efficiencies to improve consultant output and bottom line contribution”. 

 

The launch of the PEO comes as the government responded to the Taylor review, announcing it intends to require more transparency around agency workers' contractual arrangements, including a clear breakdown of who pays them and any costs or charges deducted from their wages. Managing director, Jason Medcalf, says the PEO model offers benefits to contractors and end user hirers involved in the ever more complex recruitment sector supply chain.

“For contractors the PEO offers peace of mind of being paid PAYE – with no charge at all – and having access to a suite of benefits usually reserved for permanent employees,” he says. “They also have the possibility of receiving advances on earnings from the outset. For end user hirers, where an agency partnering with PEO to payroll contractors, there is the de facto elimination of supply chain risk and reputational risk given recent press, political and union criticism of umbrella providers.” 

Chairman, Suhail Mirza adds:” Investor appetite remains prevalent within the recruitment sector. Agencies therefore need to ensure they eliminate payroll risk if they intend to attract investor interest as this is a critical issue in any deal. The PEO model delivers this result to agencies.” 

People believes that the PEO model is set for significant growth across all sectors of the UK recruitment market.



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