International Contractor Compliance in 2021

International Contractor Compliance

1st February 2021

While 2020 certainly threw a number of challenges at the recruitment sector, the team at 6CATSPRO saw a real increase in compliance queries as firms adjusted to an increasingly international scope and geared up for the potential changes in a post-Brexit world.

With demand growing significantly for compliance consulting services, we also saw exciting changes internally for both 6CATSPRO and 6CATS International. In fact, we announced at the beginning of this year the promotion of Jon Clarke to 6CATSPRO Managing Director, and equally the fact that he would be taking on the role of Group Compliance Director for 6CATS International in parallel with his role heading up our consulting team. In these new positions, Jon will continue to utilise his extensive compliance knowledge to support the provision of consultative services to recruitment businesses operating internationally.

Meet our MD

For those of you who haven’t met Jon before, he is a compliance expert with over 20 years’ experience in the industry with the ability to look at compliance with a balance of commercial and compliance perspectives. Having started his career working for a several years in contract recruitment for the French and German speaking markets, Jon went on to work with a number of international umbrella companies both in the UK and abroad before joining CXC at the start of 2015 as Commercial Compliance Director and subsequently being part of the management buy-out team that led to the creation of 6CATS International.

We caught up with Jon to talk about the story so far of 6CATSPRO and how we got to where we are today. Here’s what he had to say:

The international contractor compliance market

“6CATSPRO was born out of a need to fill a gap in the industry. We noticed an increasing number of recruitment businesses looking to take a more serious and deliberate approach to compliance and how they engaged and managed their processes internally, but the challenge was that they often didn’t have the skills or resources to deliver this or just needed a little extra support. We recognised that those recruitment businesses that had perhaps historically been more UK centric were now, as a result of market or client demands, finding themselves in international markets commonly had a particular need for support – and quickly.

With an increasing number of agencies seeing the potential of the international market as the UK became more saturated and demand for international cross-border support from end-clients on the rise, there was regularly a gap within agencies themselves in terms of global compliance capabilities and/or capacity. A gap that we knew we could fill. The most common phrase we come across in our discussions with recruitment businesses is that they tell us “we don’t know what we don’t know, and we need help to manage this”.

Since its inception back in August 2018, 6CATSPRO has grown rapidly – but organically – as the sheer demand for compliance guidance and training rapidly increased. We now have a wide range of clients that we provide solutions for, from smaller boutique firms to larger global PLC organisations.

Future growth

Looking towards the future, we fully expect to see an on-going increase in demand. Activity in 2021 has started exceptionally well. There’s a constant flow of information requests coming in from all of the types of businesses we support.

This has undoubtedly been fuelled by the Brexit uncertainty leading up to the deal. And while an agreement has been put forward, it hasn’t necessarily been hugely helpful for the recruitment industry as the majority of the deal is product rather than services focused. The cross-border concerns remain complex and a country-by-country focus is certainly the way forward at the moment. However, this in itself is highly complex to navigate. So, we’re not overly surprised that we’ve seen an uptick in queries.

One of the key things that we saw last year that is continuing into this year, though, is the number of UK agencies that were looking to have a European or international footprint to give them on-going access to Europe as a post-Brexit safeguard. We continue to assist recruitment businesses in incorporation of foreign EU entities taking on all the behind the scenes administrative duties and streamlining the process for them.

We’re also having a lot of conversations with recruitment businesses wanting to adapt their commercial terms for client and candidate engagements to make them more international and “relevant” to the markets they’re working in

I’d say at the moment the most complex issue is the concept of displaced workers, certainly in relation to Covid. Recruitment businesses are finding that they have workers who were, or have been, delivering projects and haven’t been able to continue in that location and have had to return to a different jurisdiction due to Covid. And that’s created further complexity for agencies where they had payrolls in place in certain countries that are now no longer viable.

This raises an array of compliance concerns regarding payroll, taxes and much more, that certainly puts a lot of pressure on recruitment firms at the moment. And given the fluidity of the current situation this is going to be an on-going issue in the coming months.

As things stand at the moment, the immigration situation from a European perspective for UK contractors is pretty much the way we looked at it previously when managing any international contractor from outside of the EU. Any UK contractor will be treated as a non-EU national from a third country.”

Speak to the experts

The world of international contractor compliance is becoming increasingly complex for recruitment businesses. With even a small error or oversight exposing firms to possible fines or criminal charges, getting compliance right is critical.

Contact the 6CATSPRO team to find out how they can support your business.

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