Do Umbrella Company Certifications Carry Any Actual Assurance?

6 Reasons to Question: Do Current Umbrella Certifications Carry Any Actual Assurance.

In the relatively small world of UK umbrella companies, there exists a few certification bodies who, time-after-time will tell you that their assessment process is “industry leading and integral to the supply chain”. But, especially of late, there have been compounding questions about the practices of certain umbrella companies that carry these certifications. So, do they actually carry credible assurance or are they, as some sceptics would suggest, just an expensive stamp on your website?

We’re not here to tell you either way, you’re an intelligent professional who is more than capable of judgement when presented with facts – we’re simply here to summarize, which side of the fence you sit on is entirely up to you.

  • The Certification vs. Accreditation Sell

Marketing is everything when it comes to product placement. It’s no secret that overelaboration coupled with clever word-play can turn your standard back-alley pigeon into a glitter-coated peacock. But if a certification body in the UK is playing itself off as an accreditation then it may be a case of conscious mis-marketing. “Congratulations to *company name* on their recent accreditation from *umbrella certification body*”, if you’re prone to the odd scroll on Linkedin you’ll see posts like this appear from time-to-time. In the UK, it’s actually a fact that the only organization that can offer accreditation is UKAS (The National Accreditation Body of the UK), they even have an article on the misuse of the term here: https://www.ukas.com/accreditation/about/accreditation-vs-certification

If you’re being approached with a sales pitch alluding to accreditation, be sure to ask a few questions as to who’s actually providing the accolade.

  • Who’s Policing the Police?

Each available certification has its own claims of accountability and integrity of process. They need this in order to convince you that their certification is beyond the scrutiny from your customers and supply chain. But who is overlooking their procedures? Do they have an over-arching, impartial, governing body that is ensuring their policies are fit for purpose? Or are they basing their certification on their judgement of what the industry needs? If you’re unsure, ask them, and be sure to ask what credentials they have to offer such scope over an entire industry.

  • Who’s calling the shots?

Certification is expensive, sometimes to the point of exclusivity for those who can consistently pay the annual fees. But where is this cash going? Before you commit to a certification do your research into the share-holders and operators of the certifications, you may find that some large players within the industry have a vested interest in the certification’s profit and loss account. Of course, there is nothing wrong with this – individuals and businesses have the freedom to work however they would like to within UK business parameters and law. But, as a potential customer being asked to pay a healthy sum of money, surely it would be wise to question the benefactors – especially if they represent some of your competition in the industry.

  • Member Practices

How’s the pondering going? Leaning one way or the other yet?

Of late there has been increased scrutiny of certified umbrellas. The most concerning being a holiday pay scandal whereby an umbrella, certified by one of the largest most outspoken parties in the game, was found to knowingly withhold holiday pay from contractors. Said umbrella has recently had their certification renewed.  We’re not here to play judge or jury, but if true, the practice is wrong on many levels. However, that’s not really the concern we’re trying to highlight, the concern is that this practice was not caught by the audit process of a top certification body. If they managed to miss something as major as proper allocation of holiday pay then what else are they missing? Is their procedure thorough enough to be trusted on all levels?

  • Are your best interests at heart?

“We’re here to protect contractors”, “We make umbrella operator lives easier”. Both lines that we’ve seen used by existing certification bodies, but how true are they? Let’s start with the latter. If these certifications did indeed have the umbrella operator as their focal point, then surely the certification would be open to all. Unfortunately this not the case; some certifications state that the umbrella must have a minimum amount of contractors and of course they need expendable income.

The certification is a review of umbrella company practices, so why not open it to all umbrella companies? It’s a relatively easy question to answer, if everyone is able to become certified then the certification loses its potency as a sales tool – meaning, it’s a less attractive “badge of honor” to the supply chain. Business 101: keep your prices high and offer exclusivity – maintain the need and control the market place. Unfortunately for smaller umbrellas it means that they have a very difficult time competing as they face exclusion due to size and turn over.

Section 2.9 in the recent ‘Call for Evidence: Umbrella Company Market’ by the government states:

‘The government welcomes efforts by the recruitment and employment intermediaries sector to raise and maintain high standards of compliance, ensuring that workers receive the rights to which they are entitled and that taxes are correctly deducted and paid to HMRC. However, accreditation is not a guarantee of compliance, and the government recognises that membership of an accreditation or other trade body is voluntary. Clients, workers and employment businesses are free to contract with umbrella companies that do not sign up to these standards.’

As for “We’re here to protect contractors” – I’ll refer you back to point 4.

  • Will certification mean anything when Umbrella Regulation Moves In?

This is a big question. There has been talk of umbrella company regulation with increasing volume over the past couple of years and with the recent Call for Evidence, we know that it won’t be long.  When it does happen, then there will be structured governance over the industry whereby all umbrellas must prove themselves against pre-determined criteria. Regulation brings a level playing field, it means that rules will need to be followed by ALL umbrella companies, and thus certification should no longer be needed.

Will certification bodies adapt to this? Will they add peripheral aspects such as contractor service review, reward offerings, or a “Regulation+” model that demonstrates not only compliance but additional features? Only time will tell, but when regulation does take place it will certainly be to the benefit of those umbrellas who find it difficult to gain traction in what is known to be a very exclusive arena.

What are your thoughts on umbrella certification?