There are many important factors to reflect on when considering recruitment software for UK based recruitment agencies. Most notable is using GDPR and IR35 software solutions. A recruitment CRM that is compliance-friendly is mandatory for recruitment agencies working in the UK.
How important is it to adhere to GDPR and IR35 regulations?
GDPR covers data protection laws and so all businesses here must follow the regulations. Ever since its implementation in 2018, the way businesses handle data has been transformed.
The recruitment industry is heavily dependent on data. There is a large amount of data being transferred and used every single day. As a result, all recruitment Digital Marketing Agency need to be GDPR compliant.
Recruitment agencies are involved as data processors while hiring companies have an obligation as data controllers to ensure that the information they’ve collected and used is protected legally. They are also obliged to keep the data they hold safe and protected against any breach.
IR35, while not a new law, is coming into effect for private companies from April 2021. It directly affects the contract worker and the responsibility is on the employer who is paying for the service to ensure that the contractor falls outside IR35. Being outside IR35 means that the worker is a genuine contractor.
Those contractors who fall inside IR35 have to be careful as they are the ones who should be concerned by that particular regulation. Thus, recruiters must have an IR35 software that can distinguish which contractor is genuine and who is inside IR35.
How does recruitment software help businesses be GDPR and IR35 compliant?
Recruitment software has automatic tools that can detect when it is time to seek consent from data subjects. These are individuals or businesses whose personal information is being held by data controllers.
The individual has to provide clear consent regarding the use and processing of their data. By making recruitment agencies aware that it is time to contact subjects and ask for permission, it is helping the agencies adhere to the GDPR law. The subject can ask for their data to be removed or not to be shared with third parties. But if they agree to the same then proof of the subject’s agreement is required.
GDPR law requires that systems that process the data are secure and strong. So, agencies must be careful in selecting a recruitment software is GDPR ready.
Recruitment software also makes it easy for agencies to navigate this new law come April. It starts by automatically notifying recruiters if a contractor falls inside IR35. Those contractors who are outside IR35 will have their payroll processed as usual.
The system will flag those subject to the IR35 regulations as off-payroll. Their NI and tax will be deducted at source to advance with the net pay. With IR35 software, RTI reporting is also convenient for recruiters as it integrates with the payroll software. The invoices show a clear breakdown of NI and tax contributions.
Overall, recruitment software is a necessary tool for recruitment agencies. The GDPR and IR35 laws are quite stringent. Thus, it is important to be compliant with these regulations to avoid heavy fines that can affect a business adversely.