Travel & Subsistence Schemes

The need to remain competitive in the market has emerged as a key driver for the use of travel & subsistence (T&S) schemes within recruitment, according to the results of a special survey by Recruiter Magazine

The online survey of readers carried out in late January indicates that both among those who willingly operated a T&S scheme and those who felt forced to do so; allowing staffing businesses and employers extra financial capacity to be more competitive in the rates they charge clients was a key factor.

The survey found that of those who unwillingly operated a T&S scheme, 77% said they did so because higher margins allowed them to be more competitive. Among those who willingly operated a T&S scheme the figure was 50%.

Respondents to the survey, who agreed that Recruiter could contact them for a follow-up article, say they are under huge competitive pressure to use T&S schemes. These schemes are designed for temporary workers who travel to temporary workplaces to reclaim expenses. However, critics of such schemes argue that they take workers’ pay below the minimum wage, and that the savings in National Insurance and tax made by scheme operators by paying expenses rather than wages are not shared with the workers

42% of those who say they don’t operate a T&S scheme do so on principle, despite all of them admitting it puts them at pricing disadvantage vis-à-vis their competitors who use these schemes.

The survey indicates a high level of general dissatisfaction with the ethics of T&S schemes, with 38% saying the industry would be better off without them. Many of those responding to the survey use words such as ‘dubious’, ‘evasive’ and ‘cheating’ to describe them.

T&S schemes remain a controversial issue within recruitment, with our survey indicating a virtual split down the middle – 51% of respondents operate a T&S scheme, against 49% who don’t, while 42% agree that the industry would be better off without them, with 38%

However, the survey also indicates that competitive pressures are pushing many recruiters into operating these schemes. While those who don’t operate T&S schemes are clearly at a competitive disadvantage in terms of price, even those who do use them may find that their advantage is only fleeting as clients seize on them as just another opportunity to squeeze their suppliers. Difficult though it is to achieve, competing on service and quality and less on price could be one way to avoid this depressing scenario.