Recruiters’ views on late payments sought

RA Now

As the government’s consultation on late payments nears its deadline for submissions, the Recruitment and Employment Confederation is seeking views from recruiters.

The Department of Business, Innovation and Skills’ consultation ‘Building a responsible payment culture’, aims to gather views from businesses and other stakeholders on how they can build an environment where businesses treat suppliers fairly, accept their obligations to pay what they owe when they owe it, without over-burdensome enforcement. It closes on 31 January 2014.

Getting clients to pay on time is a perennial issue for recruiters, particular small and medium-sized enterprises, who find chasing payments a major drain on resources that could otherwise be spent sourcing candidates and filling roles.

Among the mooted suggestions are to make the voluntary Prompt Payment Code mandatory and for the government to set up a new ‘prompt payment’ enforcement agency. Tighter legislation for shorter payment terms and making it mandatory for public companies to state their payment record in their annual reports could also be introduced.

“Late payments also make it difficult for agencies to manage their cash flow,” the REC stated. “After all, even if clients don’t pay on time, workers still need their wages, so agencies too often have to act as creditors and cover the shortfall.”

The confederation will highlight in its response to the consultation the particular ways late payments affect recruiters and their critical role in the jobs market.

But it is also seeking the views of recruiters on how often they have to deal with late payments or chase clients on invoices due, the prevalence of ‘pay when paid’ clauses, what kinds of companies tend to pay late and what sectors they are from and whether they would consider charging interest on late payments.