Recruitment business models

Hospital staff

18 / 1 / 2013 1.27pm

The use of recruitment business models in the NHS has often taken the form of contractors and individuals being 'headhunted' to perform senior management roles. However, their use is becoming increasingly frequent across all staff groups and is no longer limited to senior management roles.   

When trusts have used recruitment businesses in the past it has usually been on an ad hoc basis (taking the form of asking a recruitment business to find a candidate for a role), however this is changing and trusts are taking a more strategic approach to the model.

Resource pool management

One approach being widely discussed among NHS trusts are models based around the 'resource pool management' methodology for locum doctors. These approaches in effect lead to trusts signing an agreement with a broker organisation (which acts as a recruitment business) who supplies doctors to the trust. Under certain models the doctor then becomes a trust employee rather than an employee of the broker organisation. This methodology differs from the 'resource pool management' approach outlined above as often the doctors are employed on contracts that last as short as one shift- in effect creating a recruitment business model that operates like an employment business.

This clearly creates a significant administrative burden. As a part of the offer that organisations using this model make, they will handle this burden on behalf of the trust. The trust will however still have the same issues as when using the 'resource pool management' approach, and therefore before deciding to adopt this model the trust must ensure that it has resolved the issues identified above satisfactorily.

There are a number of models currently available to NHS organisations which differ in their approach and there may be potential VAT savings available to trusts available through utilising them. When engaging locum doctors through an agency, NHS trusts are required to pay VAT on the totality of the doctors pay. Under the models, it has been argued that VAT would only be payable on the resource pool managers 'finders' fee, which is likely to be significantly less than the salary.

These approaches are relatively new and it would always be advised to seek professional tax advice before proceeding with such a scheme. There have been a number of questions raised about these schemes and they have generated interest in the media.   

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