Deb Murphy, Head of Operations, FCSA on where compliance is heading for recruitment businesses.
Anyone who’s worked in recruitment for a while knows when change is coming. You can feel it before it’s written down anywhere. Right now, that sense is growing, and the word on everyone’s lips is compliance.
It’s always been part of the job, but the scale and shape of it are evolving. As we move towards 2026, we will likely see the expectations placed on recruitment businesses and payment intermediaries increasing. Compliance is no longer just a matter of ticking boxes or producing paperwork when asked; it’s about showing, clearly and consistently, that every decision you make is lawful, ethical, and traceable.
This change isn’t confined to one part of the market either. Whether you’re supplying permanent staff, contractors, or temporary workers through an umbrella company, compliance now sits at the centre of how clients choose their partners and how government shapes the rules.
A Shift from Checking to Proving
Compliance has always relied on strong foundations, and FCSA accreditation has long been the gold standard. What’s changed isn’t the value of accreditation, but the weight placed on it. Clients, auditors and regulators now expect independent, robust proof, not just internal assurances. Partnering with a trusted, established non-profit body like FCSA gives you exactly that: credible, impartial oversight that demonstrates commitment to the highest standards and stands up to scrutiny when it matters most. It’s no longer enough for the umbrella to prove they are compliant. End-Clients are wanting proof that you as a recruitment agency are only working with compliant umbrella companies.
One of the clearest examples of this shift is in payroll transparency. It’s also no longer enough to take a provider’s word that payments have been made correctly. You need to be looking at the bigger picture, the holistic view, the week on week calculations. Payslip checking tools like veriPAYE give agencies real-time visibility, looking at the full customer payroll journey, and allowing them to verify payslips directly against payroll and HMRC data. It provides proof that the liabilities have been paid to HMRC and that nothing is outstanding. This kind of independent validation doesn’t just help identify issues early, it also builds confidence with clients, protects workers, and creates a clear audit trail that stands up under scrutiny.
This requirement is being driven by a combination of factors: tighter legislation, more advanced digital tools, and a general cultural shift towards transparency. Recruiters are expected to have visibility not just of their own processes but of every link in their supply chain. That means being able to answer questions about how umbrella employees are paid, how taxes are handled, and whether employment rights are being met.
For some agencies, this feels like an extra layer of work. But, it’s also an opportunity. When you can prove your compliance, you stand apart from competitors who can only say they’re compliant.
Joint and Several Liability: A Turning Point
The most significant development on the horizon is the introduction of Joint and Several Liability (JSL). This measure will make recruitment agencies liable for unpaid taxes if their supply chain partners, such as umbrella companies, fail to comply.
On the face of it, this sounds like a major burden. In reality, it’s part of a long-term move towards shared accountability. For too long, some non-compliant operators have been able to exploit the distance between recruiters, workers, and HMRC. By making everyone in the chain responsible for compliance, the government hopes to close that gap and stop bad practice before it starts.
It’s not an attack on recruiters; it’s a way of protecting the majority who already do things right. Agencies that work with accredited umbrellas, verify payments properly, and maintain clear audit trails will be better protected than ever before. The ones cutting corners will have far more to lose.
Technology as an Enabler
The other big change is technological. For years, compliance relied on manual checks, spreadsheets, and a fair bit of trust. Now, new tools are emerging that make it possible to verify information instantly and securely.
Digital ID systems, right-to-work verification apps, and payslip validation platforms are turning what used to be a time-consuming administrative job into a streamlined, data-driven process. These systems reduce human error and allow recruiters to demonstrate compliance without disclosing sensitive information.
However, it’s worth remembering that technology is only as good as the people using it. Automation can’t replace professional judgement. Recruiters still need to understand what compliance means and be able to spot when something doesn’t look right. Technology should support your thinking, not replace it.
Compliance and Culture
What’s becoming clear is that compliance isn’t just a technical challenge – it’s cultural. It starts with leadership and filters down through every team, every consultant, and every partner.
In the best agencies, compliance isn’t an afterthought or something handled by one person at the end of the process. It’s built into conversations from the beginning. Consultants understand why it matters, and clients see it as part of the service.
When everyone understands that compliance protects people as well as businesses, the whole supply chain runs more smoothly, and the culture of accountability pays off
Workers are paid correctly, clients avoid risk, and recruiters build lasting trust.
The Human Dimension
It’s easy to treat compliance as a set of rules, but the reality is much more personal. Every payslip that isn’t correct, every contract that has fine print, every delayed payment, every missing record – it all affects someone’s livelihood.
Recruitment is a people business. When compliance goes wrong, it’s not just a policy issue, it’s someone’s rent, mortgage, or food shop that’s impacted. That’s why so much of the current debate around compliance focuses on protecting workers and restoring confidence in the system.
For recruiters, that means thinking beyond just meeting the legal minimum. It’s about making sure the people you place are treated fairly, they understand their documents, and that they are paid correctly. It’s about ensuring your partners are operating with the same level of integrity you expect of yourself.
Clients Are Paying Attention
Another reason to take compliance seriously is that clients are becoming far more discerning. Large end-hirers are under increasing pressure to demonstrate that their supply chains are clean and transparent. Many now require recruiters to prove that their intermediaries are accredited, their payments are verified, and their tax liabilities are being met.
The recruiters who can deliver that reassurance will be the ones who retain preferred supplier status. Those who can’t will find themselves excluded from bigger opportunities.
As one end-client HR director recently said to me, “We used to assume our agencies handled compliance. Now we need to see it for ourselves.” That shift in attitude is telling.
A Future of Continuous Compliance
As the market matures, we’re moving from one-off checks to continuous verification. Instead of asking for proof once a year, many clients now want assurance on an ongoing basis. That’s where the combination of digital systems and shared responsibility will really make a difference.
Real-time compliance where information is checked, logged, and stored securely as it happens is becoming the new standard. It means fewer surprises and fewer opportunities for things to slip through the cracks.
What Good Looks Like in 2026
Looking ahead, the agencies that thrive will share a few common traits:
- Transparency: Clear visibility over every partner, payment, and process.
- Verification: Independent confirmation of key data, not just trust.
- Accountability: Everyone in the chain knows their responsibilities and acts on them.
- Consistency: Compliance isn’t an annual event; it’s a daily habit.
- Culture: The team values doing things right, even when no one is watching.
None of this happens overnight, but the direction of travel is clear. Compliance is no longer something to delegate or delay; it’s central to how recruitment operates.
A Moment of Opportunity
For recruiters who care about standards, this is actually a good moment. The industry is being reshaped around professionalism and transparency, and that gives compliant agencies a chance to stand out for the right reasons.
By embracing compliance not as an obligation but as a quality marker, agencies can build stronger relationships with clients, protect workers more effectively, and raise confidence across the board.
The next few years will bring challenges, of course. New legislation, tighter oversight, and more demanding clients will keep everyone on their toes. But they’ll also bring clarity. The recruiters who put compliance first will find themselves on firmer ground, both legally and commercially.
Recruitment has always been about matching people with opportunity. The future of compliance is about ensuring that match happens fairly, transparently, and sustainably. It might take more care and attention than it once did, but it’s how we’ll build the kind of industry we can all be proud of.
