crowd of people

Contractors across the UK are continuing to be blighted by the fallout from last month’s Cyber Attacks on some of the largest umbrella employment business in the UK.

In the time since the attacks, numerous statements have been issued suggesting that they are in the process of resuming normal operations, but contractors have continued to complain of missing, delayed, and incorrect salary payments.

These companies are employing 10’s of thousands of temporary workers in the UK which begs the question is it right to have so many temporary worker’s employment concentrated in one place?

The logic of the corporate world is always that bigger is better, more compliant, and more secure but is that really the case?

Perhaps the real solution is smaller more dynamic organisations that are less likely to be targeted by malicious attacks and are better equipped to bounce back and recover.

One of the reasons that these “mega employment companies “have proliferated is that in the absence of regulation they have created their own quasi regulatory environment by setting up their own industry accreditations.

These Umbrella employment accreditations are promoted as industry standards in terms of compliance and professionalism, but the reality is that the founding members and those in control are the “mega employment companies”.

By making the barriers to entry very high particularly in terms of cost they have been able to exclude and effectively demonise many of the smaller more dynamic umbrella employment businesses as not being up to the required standard.

Add to that IR35 in the public and private sector which has forced most temporary workers to the umbrella employment model and it’s easy to see why the growth of concentration of employment to the “mega employment companies” has accelerated so much in recent years.

These cyber attacks have illustrated that there is an inherent danger in this employment concentration.

What can be done?

Well, there have been calls be respected industry participants to ban the preferred supplier model and the government’s consultation on the umbrella company market may help but the reality is your supply chain your responsibility.

Perhaps it’s time to be proactive and review your supply chain independently rather than relying on reputation, company size and accreditation.

Umbrella Check is an independent compliance business that can review the Umbrella companies in your supply chain spontaneously and continuously to ensure tax compliance and payroll competence.