One month into the implementation of Joint and Several Liability (JSL), the temporary labour sector is witnessing a migration to "safety" that may be anything but safe. In a bid to minimise risk, many agencies and Managed Service Providers (MSPs) have consolidated their umbrella payroll Preferred Supplier Lists (PSLs) based on two flawed metrics: balance-sheet scale and commercial rebates.
While the “bigger is better” philosophy might appear to be the safer option, it fails to account for a major influential factor: In a talent-short market, the cost of contractor churn is the single greatest threat to agency profitability.
The Fallacy of the "Factory Model"
By prioritising providers on volume and short-term financial incentives, the industry has inadvertently embraced a "factory model" of payroll. When an umbrella provider operates solely on volume and margin, the contractor experience is the first thing to be sacrificed. Communication becomes algorithmic, errors are handled by ticket queues, and the "human" element of payroll, the very thing that keeps a contractor on-site, evaporates.
The cost of losing one worker, mid-contract, rapidly offsets any marginal increase in commercial terms. Add in the reputational and relationship damage, and a lost contractor represents a far bigger financial “hole” than any rebate could fill.
The Strategic Pivot: Retention as a Revenue Driver
At Odyssey, we see contractor retention as the true long-term revenue driver. We exploit technology and AI to maximise process efficiency and manage the complexities of registration, onboarding, and compliance. These efficiencies free us to focus on what actually drives your bottom line: your contractor’s well-being and loyalty.
Our "Contractor-First" strategy is more than an ambition to provide a personal service; it's an intentional roadmap to commercial longevity and success. By providing a seamless, proactive, and genuinely supportive payroll experience, we ensure your talent stays focused on the job rather than searching for their next one.
As JSL beds down into everyday processes, the most successful recruitment businesses will be those that recognise that true profitability lies in partnerships that value long-term retention over short-term commercial arrangements.
If you’re already seeing an increase in worker turnover, or are just looking for a partner that can offer a transparent and compliant solution that retains a contractor-first approach, contact the team at Odyssey on 0121 663 6900 or info@odysseycs.co.uk